1st Interim Report January – March 2009 ­­­ ­­­Group overview

Key figures Jan. – March Jan. – March Change 2009 2008 3) in % Revenue and result Revenue €m 5,015 5,588 – 10.3 - of which traffic revenue €m 3,813 4,467 – 14.6 Operating result €m – 44 172 EBIT €m – 205 94 EBITDA €m 255 452 – 43.6 Net profit/loss for the period €m – 256 44 Key balance sheet and cash flow statement figures Total assets €m 24,468 22,790 7.4 Equity ratio % 26.1 28.7 – 2.6 pts Net liquidity 1) €m 46 888 – 94.8 Cash flow from operating activities €m 708 741 – 4.5 Capital expenditure €m 664 808 – 17.8 Key profitability and value creation figures Adjusted operating margin 2) % – 0.6 3.2 – 3.8 pts EBITDA margin % 5.1 8.1 – 3.0 pts The Lufthansa share Share price at the balance sheet day € 8.17 17.13 – 52.3 Earnings per share € – 0.56 0.10 Traffic figures Passengers thousands 15,033 15,994 – 6.0 thousand Freight/mail tonnes 375 485 – 22.7 Passenger load factor % 74.0 77.2 – 3.2 pts Cargo load factor % 54.9 66.5 – 11.5 pts Available tonne-kilometres millions 7,887 8,155 – 3.3 Revenue tonne-kilometres millions 5,155 5,872 – 12.2 Overall load factor % 65.4 72.0 – 6.6 pts Number of flights 187,738 195,677 – 4.1 Employees Employees as of 31.3. number 106,840 106,307 0.5

1) Long-term securities serving as liquidity reserves and cashable at short notice have been included in the calculation of net liquidity. 2) Ratio for comparability with other : (operating result + reversals of provisions) /revenue. 3) Last year’s figures have been adjusted in line with IFRIC 13.

The interim report at 31 March 2009 was prepared in accordance with the rules of IAS 34, taking into account the stand- ards ­applicable since 1 January 2009. More information on changes to the accounting standards can be found in the Notes to the consolidated financial statements on page 30. Date of disclosure: 30 April 2009.

Contents

1 To our shareholders 30 Notes to the financial statements 3 Interim management report 3 6 Credits/Contact 24 Interim financial statements Financial calendar 2009/2010 To our shareholders I Interim management report I Interim financial statements I Notes to the financial statements Letter from the Executive Board

Dear Shareholders,

The global recession and ensuing decline in demand have also these difficult times. We are adjusting where necessary and are left their mark on Lufthansa. In the first quarter the Group was not ready to act when opportunity knocks. In February Lufthansa Italia able to achieve a balanced result, reporting an operating loss of had a successful launch in . EUR 44m. This is the same level as in 2005 and 2006, but at that time we were at a much better point on the economic cycle. The consolidation of the European aviation sector is progressing, and we are continuing to advance our ongoing transactions. The In the years of a strong economy we deliberately deployed our takeover offer to shareholders of EUR 4.49 per thrust and so can now maintain our course and continue our share runs until 11 May. We will be filing the documentation for the flight safely. This is thanks to the achieved operating flexibility and anti-trust review with Brussels at the beginning of May. Lufthansa’s sound and very robust financial profile. Even in these A decision in the anti-trust review procedure for the takeover of circumstances we have therefore been able to raise EUR 1.5bn in the British bmi is not expected before 14 May 2009. The new funding via the successful issue of private placements and a planned takeover of is also currently the sub- bond in the first quarter. ject of a detailed review by the European Commission. However, Lufthansa and Brussels Airlines have already extended the scope But this year is full of challenges, even for the Lufthansa crane. In of their cooperation under existing agreements from the start of the the traditionally weak first quarter the companies in the Passenger summer flight timetable. Airline Group and in particular registered a weak demand, and revenue and operating result for both segments are Lufthansa’s development towards a group system of independ- therefore well below last year’s strong figures. Due to this develop- ent airlines is reflected in the new allocation of responsibilities for ment, both companies carried out the necessary adjustments to the Executive Board, which the Supervisory Board approved on capacity under predefined phased plans as well as implementing 23 April. At the same time Christoph Franz was appointed to the extensive other cost-cutting measures. Executive Board of Deutsche Lufthansa AG and as its Deputy Chairman with effect from 1 June 2009. The MRO segment was able to increase revenue, against the general trend for its sector, but its operating result was below last Just like the pilots on board our aircraft, the with year’s. IT Services could not match last year’s figures for revenue its experienced management team and motivated staff has all the or operating result. In contrast, the Catering segment improved its instruments at its fingertips to fly through the current turbulence operating result despite declining revenue due to a positive one-off safely. Even if we have to fly around the odd storm, our general effect. course remains the same: to stay true to our performance and quality promise and to act according to the principle of sustainable Dear shareholders, even if current conditions are turbulent, we are value creation. convinced of the long-term growth potential of the aviation market. In order to be a part of this, Lufthansa is not neglecting either the Thank you very much for your confidence. development of its products or that of its route network, even in

Wolfgang Mayrhuber Stephan Gemkow Stefan Lauer Chairman of the Executive Member of the Executive Board Member of the Executive Board Board and CEO Chief Financial Officer Chief Officer Aviation Services and Human Resources

Lufthansa 1st Interim Report January–March 2009 1 Share The stock market faithfully reflected the continuing world eco- nomic crisis in the first three months of the 2009 financial year. Further downward adjustments to economic forecasts particularly depressed the general mood. Reserved statements by many companies on their expected results for the financial year 2009 contributed to the poor stock market performance, as did the a sustained effect on the share price. The Lufthansa share could continuing negative effects of the crisis on credit markets. The oil not extricate itself from the negative overall trend. Due to its sound price, which was still low compared with the previous year, was not fundamentals and the conviction that Lufthansa will emerge as one able to provide tangible relief. All the leading indices reflected this, of the winners from the crisis, the majority of analysts still recom- registering sharp falls in some cases. The German share index mend to buy or hold the Lufthansa share. The average target price DAX reported a decline of more than 15 per cent in the reporting from all analysts is well above the current price at EUR 11.65. period to 4,085 points. Shareholder structure by nationality (as of 31 March 2009) in %

Lufthansa’s share price trend (indexed on 31 December 2008) compared with the DAX and competitors 1.3 in % UK 2.4 Other 2.1 120 DAX USA 6.0 Lufthansa British Airways Luxembourg 9.3 Air France-KLM 100 78.9

80 As of 31 March 2009 a total of 78.9 per cent of Lufthansa’s share capital was held by German investors. Luxembourg came 60 in second place with 9.3 per cent, before the USA with 6.0 per 31.12. 29.1. 28.2. 31.3. cent. AXA Group was by far the largest single shareholder with 2008 2009 10.56 per cent. Including the stakes held by Dresdner Bank AG and Süddeutsche Industrie-Beteiligungs-GmbH, Commerz- In this environment the Lufthansa share price sank by 27 per cent bank AG now holds 3.06 per cent of Lufthansa’s share capital. up to 31 March, dropping to EUR 8.17. Its development was initial- 68.2 per cent of shares were owned by institutional investors ly in parallel with the DAX, but from the end of February the share, and the remaining 31.8 per cent were therefore held by private as those of its competitors, could no longer escape the adverse individuals. The free float came to 100 per cent. Details of the sentiment toward the industry. In this environment not even positive shareholder structure are updated regularly and published on company news, such as the still positive outlook, was able to have our website at www.lufthansa.com/investor-relations.

2 Lufthansa 1st Interim Report January–March 2009 To our shareholders I Interim management report I Interim financial statements I Notes to the financial statements Economic environment and sector performance

The Euro-Zone, including Germany, continues to face recession. Capital expenditure is weak, as the impetus from export-driven demand is absent. Private consumption is ebbing away here too, Interim management report burdened by falling asset prices and the distinctly gloomier state of the labour market. Economic environment and sector developments The global economy is currently going through the worst depres- At the beginning of the year the euro was worth USD 1.40. After sion since the Second World War. The downturn which began in falling sharply to USD 1.2537, it recovered slightly to end the month the second half of last year continued into the first quarter of 2009. of March at USD 1.3205. The average rate for the first quarter was The global economic slump even worsened, affecting all sectors USD 1.31/EUR (–12.9 per cent year on year). and regions worldwide. Global trade has seen a massive collapse since the end of the year due to diminished demand and the fall in As a company with operations worldwide, various positions in worldwide industrial production. Lufthansa’s income statement are affected by exchange rate move- ments. Lufthansa therefore follows a continuous, rule-based hedg- The downward trend is being exacerbated by the persistent tension ing policy which is largely independent of opinions about future on financial markets. Emerging economies, which in the past were exchange rates. More detailed information is available in the 2008 an important pillar of the global economy, have also increasingly Annual Report on pages 121 and 183. been swept along by the international recession, particularly China and India. In recent years both countries had benefited from rapidly growing trade volumes and direct investments. Price development of oil (Brent) and kerosene in USD/t

This synchronous downturn of the entire global economy is a new 1,500 phenomenon, which is leading to an increase in unemployment 1500 numbers around the world. Faced with this scenario, central banks 1,200 and governments around the world have responded with monetary 1200 and fiscal stimulus packages of considerable size to avert further 900 insolvencies and job losses. 900 600

Year-on-year GDP growth 2009 600 300 in % Q1 * Q2 * Q3 * Q4 * Full year * Crude oil Kerosene 300 World – 2.7 – 3.1 – 3.0 – 1.4 – 2.5 0 Europe – 3.9 – 4.3 – 4.2 – 2.8 – 3.8 2.1. 30.6. 2.1. 30.6. 2.1. 30.3. 2007 2008 2009 0 - Germany – 5.4 – 5.4 – 5.2 – 3.3 – 4.8 North America – 2.7 – 4.1 – 4.3 – 2.6 – 3.4 South America – 1.8 – 1.8 – 2.8 – 0.6 – 1.7 Up to mid-March 2009 crude oil prices were not very volatile and Asia/Pacific – 1.9 – 1.5 – 0.9 1.2 – 0.7 mainly moved sideways. Prices picked up again from mid-March - China 5.5 5.8 6.0 6.2 5.9 2009, partly in the hope that the global economic crisis had begun Middle East 0.5 – 0.6 – 0.9 – 0.5 – 0.6 to lessen. The average price for Brent crude in the first three months Africa 2.6 1.4 0.7 0.6 1.3 of the year was USD 46/barrel and therefore below the figure of Source: Global Insight World Overview as of 14 April 2009. USD 50/barrel for the first quarter of 2008. The price moved within a * Forecast. range of between USD 40/barrel and USD 54/barrel. The differ- The USA is currently experiencing an incomparably deep reces- ence to the price for kerosene (“jet fuel crack”) was much lower in sion. Stuttering consumption in the retail sector, falling production the first three months than in 2008 as a result of lower demand and and tougher lending terms from banks are posing huge problems. higher stocks at the same time. The price moved within a range of In February the US administration passed another massive stimulus between USD 386/tonne and USD 552/tonne. The average price programme of USD 787bn to stabilise the economy. came to USD 446/tonne in the first quarter 2009 (52.9 per cent

Lufthansa 1st Interim Report January–March 2009 3 below the same period last year). Lufthansa also uses a systematic hedging policy for fuel to smoothen price fluctuations in both direc- Lufthansa’s ongoing transactions with Austrian Airlines, ­Brussels tions and thereby achieve greater certainty in planning. At the same Airlines and bmi are currently being vetted by the European time the hedging policy and hedging instruments retain a high Commission. degree of flexibility so that, on the whole, the Group can benefit from the current fall in prices. More information on this topic can be The European parliament has now passed the legislation to create found in the 2008 Annual Report on pages 120 f. and on page 183. a European airspace (Single European Sky II). Implementing one of the core elements, the creation of nine functional airspace blocks, After years of economic growth the global economic slump is in addition to helping the environment, would also save the airlines increasingly affecting the aviation industry. The fall in demand considerable expenses. already visible at the end of last year worsened considerably in the first three months of the current year. According to IATA figures, Course of business sales of passenger flights fell by 11.1 per cent and freight volumes Against the backdrop of a worsening economic environment and even by 21.4 per cent compared with last year. All regions, with the resultant drastic fall in demand, the Lufthansa Group had to the exception of the Middle East (passenger traffic: +4.7 per cent), report a decline in revenue and volumes in the first quarter, after a are affected. Demand for higher-priced travel (First and Business successful 2008 financial year. The first quarter is traditionally weak, Class) is sinking disproportionately quickly. To counter the decline and as the previous year’s figures were particularly strong, the com- in demand, airlines have reduced capacity in passenger traffic by panies in the Passenger Airline Group and Lufthansa Cargo AG in a total of 4.4 per cent and in freight traffic by 7.8 per cent year on particular were faced with an accelerating fall in demand. Revenue year. Increased capacity was only reported for the Middle East, and operating result for both segments were well below last year’s. where passenger traffic grew by 13.1 per cent and freight traffic by They reacted to these developments with a comprehensive set of 7.8 per cent in the first three months. measures. In view of the gloomy forecasts Lufthansa Cargo initiated a multi-stage programme to safeguard earnings last December, Economic pressures are also accelerating the consolidation which has since been successively extended. Freighter capacities process underway in the airline industry. In Germany, Air Berlin were cut drastically, operating and staff costs were reduced and and TUIfly are about to conclude a cooperation which is also to project budgets were scaled back. Similar steps were also taken in involve cross-shareholdings. In addition, the Turkish ESAS Hold- the Passenger Airline Group. Details on the individual measures can ing, parent company of the holiday airline Pegasus, announced be found in the chapters on the respective segments. that it had taken an equity stake in Air Berlin at the end of March. It acquired around 15 per cent of the shares held by UBS, sub- The MRO segment was able to increase revenue, but its operating ject to the approval of the German Federal Competition Authority result was below last year’s. IT Services could not match last year’s (Bundeskartellamt). figures for either revenue or operating result. The Catering segment improved its operating result despite declining revenue due to a Air France/KLM confirmed its participation in the bidding process positive one-off effect. for Czech Airlines. In addition, the Greek Marfin Investment Group, in which a state-owned investment company from the Emirate of As the course of business remains weak, the programme to safe- Dubai holds a stake, is planning a takeover of Olympic Airlines. guard earnings is to be extended in all segments.

4 Lufthansa 1st Interim Report January–March 2009 To our shareholders I Interim management report I Interim financial statements I Notes to the financial statements Course of business

Significant events Lufthansa has initiated a further step in the acquisition of Austrian Airlines. On 27 February 2009 a public purchase offer was made to the shareholders of Austrian Airlines Staff and management The Lufthansa Group had 106,840 AG at a price of EUR 4.49 per share. The deadline for acceptance employees on the reporting date, or 0.5 per cent more than the ends on 11 May 2009. The price offered is based on the trade- previous year. The number of staff in the Group fell by around 1 per weighted average price for the six months before the takeover bid cent quarter on quarter due to the hiring freeze. was published. This corresponds to a premium of around 30 per cent compared with the closing price on 26 February 2009. The Employees by business segment (as of 31 March 2009) in % transaction is subject to conditions precedent, including competi- tion authority approval and approval by the European Commis- IT Services 3.0 sion of the restructuring aid of EUR 500m to be provided by the Republic of Austria. Passenger Airline Group 44.6 Catering 28.7

Thanks to its solid financial profile and investment grade rating Lufthansa has been able to secure further long-term financing. MRO 19.2 The Company again raised funds on favourable terms, issuing a five-year bond for EUR 850m at 410 basis points over the mid Logistics 4.5 swap rate despite the currently tense situation on capital markets. The bond was five times oversubscribed and was the first issue under the European Medium Term Note Programme, under which The collective bargaining dispute between Lufthansa and the Lufthansa can issue bonds flexibly in various currencies and with unions UFO and ver.di was laid to rest in March 2009 with the different maturities on the European bond market. In particular, this conclusion of a new wage agreement following intensive negotia- bond and private placements of approximately EUR 600m enabled tions. The agreement provides for a salary rise of 4.2 per cent for total new funding of EUR 1.5bn to be raised successfully. some 16,000 flight attendants backdated to 1 January 2009. This agreement notwithstanding, the three entry-level pay grades were Changes in the group of consolidated companies There were no increased disproportionately by EUR 100 each and staff in these significant changes to the group of consolidated companies com- pay grades also receive a one-off payment of EUR 100. In addi- pared with the same period last year. Individual changes compared tion, the agreement gives staff a profit-related bonus of up to 3 per with year-end 2008 and 31 March 2008 are shown in the table on cent of annual salary for the year 2008. The collective bargaining page 30. These changes had no significant effect on the consoli- partners also resolved to partially withdraw the measures agreed dated balance sheet and income statement in comparison with the in 2005 and agreed on improved working conditions. The wage same quarter last year. agreement is valid for 14 months and ends on 28 February 2010.

However, IFRS 8 “Operating Segments” and IFRIC 13 “Customer At the end of February 2009 the Lufthansa Training and Confer- Loyalty Programmes”, which are binding as from 1 January 2009, ence Center, one of the most modern conference centres in have resulted in changes in reporting requirements. In the interest Germany, was opened in Seeheim after a construction period of comparison, the figures presented in this report have been cal- of almost two years. The centre is the main site for vocational culated as if the amended standards had already been applied last and professional training courses, seminar and conferences for year. For further details see the notes to the consolidated financial Lufthansa staff of over 150 nationalities and can also be used by statements on page 30. external customers.

Lufthansa 1st Interim Report January–March 2009 5 Earnings position Group revenue sank as a result of lower traffic revenue by 10.3 per In the first quarter 2009, Lufthansa Group’s traffic declined con- cent to EUR 5.0bn. The Passenger Airline Group’s share of total siderably compared with the same period last year. The Group’s revenue decreased to 71.4 per cent (–1.0 percentage points). The airlines transported some 15 million passengers (–6.0 per cent) graph on page 7 shows the development of revenue over the last and around 0.4 million tonnes of freight and mail (–22.7 per cent). five years. A breakdown of revenue by region is included in the In passenger traffic, sales were down by 6.2 per cent and cap­ segment reporting on page 35. acity by 2.1 per cent, causing the passenger load factor to fall by 3.2 percentage points to 74.0 per cent. Sales in the Group’s Revenue distribution by business segment in % airfreight business (including SWISS World Cargo) as measured in tonne-kilometres declined by 21.3 per cent, while capacity was cut Catering 7.7 IT Services 1.2 by 4.7 per cent. The cargo load factor sank as a result by 11.6 per- centage points to 54.9 per cent. The individual performance figures and indicators for the other business segments are presented in MRO 12.6 the respective chapters. Logistics 9.2 Passenger Lower traffic in the first three months was also reflected in traffic Airline Group 69.3 revenue. It contracted over the reporting period by 14.6 per cent to EUR 3.8bn. Volumes accounted for 8.8 per cent and pricing for 7.4 per cent of the lower revenue. In contrast, currency effects had a positive effect of 1.6 per cent. The segment Passenger Airline Other operating income rose by EUR 159m to EUR 704m, especial- Group accounted for EUR 3.3bn (–11.5 per cent) of traffic revenue ly due to exchange rate gains (EUR +35m) and recognised income in the reporting period and the Logistics segment for EUR 0.4bn from insurance payments in connection with a damage claim in (–31.7 per cent). Scandinavia and compensation payments for the Internet system Flynet totalling EUR 69m. Of total income from write-backs (EUR Other revenue in the reporting period came to EUR 1.2bn, or 13m), EUR 7m relate to reversals on four previously written-down 7.2 per cent above last year, primarily due to higher MRO revenue. Airbus A300-600s due to prices since realised in USD and higher The MRO segment reported revenue of EUR 630m (+19.8 per USD exchange rates. The sale of the remaining Condor shares cent), IT Services EUR 61m (–1.6 per cent) and Catering EUR 387m gave rise to book gains of EUR 18m. Other items did not vary sig- (–2.5 per cent). The airlines in the Passenger Airline Group and nificantly compared with the previous year. Logistics segments contributed EUR 124m (–8.9 per cent) to other revenue. Total operating income came to EUR 5.8bn (–6.8 per cent).

Operating expenses Jan. – March 2009 Jan. – March 2008 Changes in €m in €m in % Cost of materials and services 2,871 3,048 – 5.8 - of which fuel 739 1,071 – 31.0 - of which fees and charges 801 825 – 2.9 Staff costs 1,435 1,392 3.1 Depreciation, amortisation and impairment 319 297 7.4 Other operating expenses 1,227 1,245 – 1.4 - of which sales commission paid to agencies 113 159 – 28.9 Total operating expenses 5,852 5,982 – 2.2

6 Lufthansa 1st Interim Report January–March 2009 To our shareholders I Interim management report I Interim financial statements I Notes to the financial statements Earnings position

Other financial items amounted to EUR –141m. This includes an impairment charge on the Fraport shares of EUR 140m.

Earnings before interest and taxes (EBIT) includes profit from operating activities as well as the result from equity investments and other financial items and came to EUR –205m (EUR 299m down on last year). Earnings before taxes (EBT) sank by EUR 327m, totalling Operating expenses sank by 2.2 per cent to EUR 5.9bn. The EUR –273m. As the pre-tax result was negative in the reporting decline is principally due to the reduction in the cost of materials ­period, income taxes of EUR 21m were added to the result. Last and services by 5.8 per cent to EUR 2.9bn. This was caused by the year income tax expenses of EUR 7m were incurred. 31.0 per cent or EUR 332m reduction in fuel costs. Lower volumes accounted for 6.9 per cent of the fall. The fuel price (after hedging) The net profit/loss for the period after minority interests (EUR 4m) sank by 37.9 per cent. The stronger USD had the opposite effect, was EUR –256m (last year: EUR 44m). Earnings per share were increasing costs by 13.8 per cent. Fuel costs include a negative therefore EUR –0.56 (diluted and undiluted, see also the notes on result of price hedging of EUR 48m. page 32).

Fees and charges fell by a total of 2.9 per cent, largely due to The graphs below show the development of net profit/loss and the lower handling charges. Within other purchased services the main operating result over the last five years. increases came from external MRO services (+30.2 per cent) and charter expenses (+17.9 per cent). Revenue development (Jan.–March) in €m 5,588 5,015 Staff costs went up by 3.1 per cent. This was mainly the result of 4,696 4,446 wage agreements signed the previous year, as the average number 3,903 of employees rose by just 0.5 per cent. On average over the year the Group had 106,840 employees.

Depreciation and amortisation went up due to additional aircraft deliveries last year to EUR 319m (+7.4 per cent). 2005 2006 2007 2008 2009 Other operating expenses remained stable year on year at EUR 1.2bn. Higher exchange rate losses (up EUR 21m) and write-downs on current financial investments (up EUR 8m) were offset by a de- cline of EUR 46m in agency commissions. The other items did not Net profit/loss for the operating result and period (Jan.–March) in €m vary significantly compared with last year. 554 Profit from operating activities came to EUR –64m and was there- fore EUR 289m lower than in the same period last year. Adjusted for non-recurring factors, the operating result (see table on page 172 9) was EUR –44m compared with EUR +172m in the particularly 36 44 strong first quarter of 2008. The adjusted operating margin fell to – 26 – 75 – 44 –0.6 per cent (last year: 3.2 per cent). – 116 – 98 – 256 The result from equity investments broke even in the first quarter 2005 2006 2007 2008 2009 2009 (last year: EUR –4m). Net interest fell, mainly due to higher Operating result Net profit/loss for the period interest on pension provisions, by EUR 28m, coming to EUR –68m.

Lufthansa 1st Interim Report January–March 2009 7 Cash flow & capital expenditure Cash flow from operating activities of EUR 708m (last year: EUR 741m) was earned in the first three months of the 2009 financial year. The decline in earnings before taxes of EUR 327m was par- tially offset by EUR 132m higher non-cash depreciation and amor- tisation. Other positive effects on cash flow from operating activities Primary, secondary and financial investments (Jan.– March) in €m stemmed from income tax rebates and changes in working capital.

1000 Gross capital expenditure totalled EUR 664m, of which EUR 519m 808 went on final payments for two Airbus A340s, one Airbus A330, one 664 800 240 47 Airbus A321, three Airbus A320s, four Airbus A319s, two Cessna 600 75 98 Citations and four Embraer E195s as well as on aircraft overhauls 400 and advance payments on aircraft. A total of EUR 47m was spent 200 to purchase financial assets. A further EUR 2.0bn were invested 493 519 in current securities and fund investments. Repairable spare parts 0 2008 2009 were purchased for an additional EUR 96m. The total funding requirement was partly covered by interest and dividend income Primary investments Secondary investments Financial investments (EUR 45m in total) and proceeds from the disposal of assets (EUR 131m). The disposal of the remaining Condor shares and repay- ment of related loans resulted in a cash inflow of EUR 77m. In total Net assets and financial position this meant that EUR 2.5bn in net cash was used for investing and The consolidated balance sheet total amounted to EUR 24.5bn cash management activities (last year: EUR 928m). as of 31 March 2009, or EUR 2.1bn more than at year-end 2008. Non-current assets rose only slightly by EUR 96m to EUR 15.1bn Free cash flow is the sum of cash flow from operating activities less while current assets went up by EUR 2.0bn to EUR 9.4bn. net capital expenditure. It came to EUR 214m. The detailed cash flow statement is shown on page 29. Within non-current assets the items aircraft and spare engines increased by EUR 233m due to additions and derivative financial Financing activities, i.e. new borrowing, scheduled capital repay- instruments (mostly from currency hedges) by EUR 141m. Equity ments on existing borrowing, dividend payments to minority share- investments fell by EUR 173m and non-current securities by EUR holders and current interest payments, produced a net cash inflow 120m. of EUR 1.3bn. Successful fund-raising in the first quarter attracted EUR 1.5bn, particularly from the issue of private placements and a Within current assets the receivables rose by EUR 441m, reflect- bond. ing seasonal and billing factors. Securities went up by EUR 2.0bn, largely due to the investment of cash inflows. At the same time cur- After accounting for lower valuations of cash and cash equivalents rent derivatives (mainly from currency hedges) increased by EUR due to exchange rate movements (EUR –14m), cash and cash 129m and cash and cash equivalents sank by EUR 465m. equivalents declined in total by EUR 465m to EUR 1.0bn (last year: EUR 2.0bn). The internal financing ratio was 106.6 per cent (previ- As a result the proportion of non-current assets in the balance ous year: 91.7 per cent). Overall, cash including securities at the sheet total declined from 66.8 per cent at year-end 2008 to end of the quarter came to EUR 4.8bn (last year: EUR 3.7bn). 61.6 per cent.

8 Lufthansa 1st Interim Report January–March 2009 To our shareholders I Interim management report I Interim financial statements I Notes to the financial statements Net assets and financial position

With regard to shareholders’ equity and liabilities, the valuation as of 1 January 2009. This decline stems mainly from the negative change for miles awarded under bonus miles programmes but not post-tax result of EUR –256m, which was partially offset by positive yet used, in accordance with IFRIC 13, meant that the correspond- changes in the market value of hedging transactions without effect ing obligations rose compared with the consolidated financial on profit and loss and other financial assets (EUR +45m). The statements as of 31 December 2008 from EUR 1.0bn to EUR 1.5bn equity ratio at the end of the quarter was 26.1 per cent. as of 1 January 2009. As a result the deferred tax liabilities de- clined by EUR 103m – also as of 1 January 2009 – and equity by Non-current liabilities and provisions went up by EUR 1.6bn to EUR 325m to EUR 6.6bn. This adjustment caused the equity ratio EUR 9.3bn and current borrowing also rose by EUR 694m to EUR to fall from 30.9 per cent to 29.4 per cent as of 1 January 2009. 8.8bn. The rise in non-current borrowing is due to increased finan- In the first quarter shareholders’ equity (including minority inter­ cial debt of EUR 1.6bn. The newly assumed private placements ests) dropped by EUR 212m compared with the adjusted figure and the bond were responsible for the increase.

Reconciliation of results Jan. – March 2009 Jan. – March 2008 Recon­ciliation Recon­ciliation Income with operating Income with operating in €m statement result statement result Revenue 5,015 5,588 Changes in inventories 69 74 Other operating income 704 545 - of which income from book gains and current financial investments – 32 – 23 - of which income from reversal of provisions – 16 – 6 - of which write-ups on fixed assets – 13 – 1 - of which period-end valuation of non-current financial liabilities – 75 Total operating income 5,788 – 6 1 6,207 – 105 Cost of materials and services – 2,871 – 3,048 Staff costs – 1,435 – 1,392 - of which past service cost Depreciation, amortisation and impairment – 319 – 297 - of which impairment charge 3 Other operating expenses – 1,227 – 1,245 - of which expenses incurred from book losses and current financial investments 39 31 - of which period-end valuation of non-current financial liabilities 39 21 - of which provisions for contingent losses Total operating expenses – 5,852 81 – 5,982 52 Profit from operating activities – 6 4 225 Total from reconciliation with operating result 20 – 53 Operating result – 4 4 172 Income from subsidiaries, joint ventures and associates 0 * – 4 Other financial items – 141 – 127 EBIT – 205 94 Write-downs (on profit from operating activities) 319 297 Write-downs on financial investments (incl. at equity) 141 61 EBITDA 255 452

* Rounded below EUR 1m.

Lufthansa 1st Interim Report January–March 2009 9 The increase in current liabilities results primarily from higher trade payables due to seasonal and billing factors and other financial li- abilities (EUR +413m) as well as from higher liabilities from unused flight documents (EUR +380m).

As of 31 March 2009 net liquidity (including non-current liquidity reserves of EUR 366m) came to EUR 46m compared with EUR 125m as of year-end 2008. Gearing, including pension provisions, was 37.7 per cent (year-end 2008: 34.5 per cent).

Group fleet Number of commercial aircraft of Deutsche Lufthansa­­ AG (LH), SWISS (LX), ­Lufthansa­­ Cargo (LCAG), ­Lufthansa­­ CityLine (CLH), (EN), E­urowings (EW) and (4U) as of 31 March 2009 Manufacturer/type Number Group of which of which Change Change fleet finance operating as of as of lease lease 31. Dec. 08 31. March 08 LH LX LCAG CLH EN EW 4U Airbus A300 13 13 – 1 Airbus A310 4 4) 4 24 7 27 58 1 14 + 2 + 4 Airbus A320 36 22 58 10 + 2 Airbus A321 33 6 39 4 + 2 Airbus A330 15 11 26 9 + 1 + 2 Airbus A340 51 15 66 1 5 + 2 + 6 Airbus A380 0 Boeing 737 63 63 Boeing 747 30 30 Boeing MD-11F 19 19 Canadair Regional­ Jet 9 1) 55 10 74 10 ATR 14 11 25 6 12 – 1 Avro RJ 20 18 38 19 BAe 146 4 2) 15 20 19 Embraer 4 2) 4 4) 8 4 + 4 + 4 Cessna 4 3) 4 + 2 + 3 Total aircraft 291 85 19 73 14 36 27 545 8 106 11 21

1) Leased out to . 2) Leased out to Air Dolomiti. 3) Leased out to SWISS. 4) Leased out to companies outside the Group.

10 Lufthansa 1st Interim Report January–March 2009 To our shareholders I Interim management report I Interim financial statements I Notes to the financial statements Passenger Airline Group segment

year have been adjusted as if the amended standards had already Passenger Airline Group segment been applied last year. This meant that last year’s operating result decreased by EUR 1m to EUR 37m. More information is available Passenger Airline Group SWISS in the notes to the consolidated financial statements on page 30 ff. Jan. – Jan. – Change Jan. – March March in % March 2009 2008 3) 2009 In the planned takeover of AUA, Lufthansa published its offer to the free-float shareholders of EUR 4.49 per share on 27 February. Revenue €m 3,614 4,079 – 11.4 690 The offer is valid until 11 May and subject to an acceptance ratio - of which with companies of the Lufthansa Group €m 139 151 – 7.9 10 of 75 per cent. An agreement has already been reached with the Operating result €m – 30 37 – 42 major shareholder ÖIAG on the purchase of its 41.56 per cent stake by Lufthansa. Segment result €m – 24 26 – – EBITDA 1) €m 163 326 – 50.0 86 The acquisition of the British airline bmi is subject to regulatory Segment capital ­expenditure €m 558 490 13.9 160 conditions such as approval under the European Commission’s merger control procedure. The competition authority is not ex- Employees as of 31.3. number 46,070 45,893 0.4 7,281 pected to decide before 14 May 2009. Passengers 2) thousands 15,033 15,994 – 6.0 2,951 Available seat-kilometres 2) millions 44,179 45,116 – 2.1 8,501 The planned takeover of Brussels Airlines is also awaiting approval Revenue passenger- by the European Commission under the merger control procedure ­kilometres 2) millions 32,681 34,826 – 6.2 6,223 and is currently the subject of a more detailed review, which is due 2) Passenger load factor % 74.0 77.2 – 3.2 pts 73.2 for completion by 1 July 2009. Lufthansa and Brussels Airlines 1) Before profit/loss assumed from other companies. have already extended the scope of their cooperation under 2) Without Germanwings. existing agreements from the start of the summer flight timetable 3) Last year’s figures have been adjusted due to a new segment structure (IFRS 8) and valuation changes in line with IFRIC 13. on 29 March. In addition to offering code-sharing connections between Germany and Belgium and other European destinations, Course of business The global economic downturn had a they now also offer their customers the opportunity of using each particular impact on traffic in this business segment. Reduced pas- other’s frequent flyer programmes. Both airlines’ lounges are now senger numbers caused load factors to fall and increased pressure available to all business class travellers. The ticket rates of the two on average yields. Traffic revenue went down sharply as a result. airlines can now be combined as well. In order to bring operating Accordingly, the operating result could also not match last year’s processes closer together in physical terms, Brussels Airlines is to particularly strong performance and registered a loss. In view of the move into the terminal used by Lufthansa at Hamburg airport. persistent weakness in demand the capacity cuts already agreed were extended. Product and route network In view of the slump in demand Lufthansa Passenger Airlines has taken the required steps and cut Segment structure The segment consists of Lufthansa Passenger capacities by 3.3 per cent in total. The number of destinations re- Airlines (including regional airlines, Miles & More, Worldshop, etc.), mains unchanged, but the frequency of connections on some flight Swiss International Air Lines AG, Germanwings and the equity segments has been reduced. investments in British Midland (bmi), SunExpress and JetBlue. With an eye to developing the route network over the long term Pursuant to IFRS 8 “Operating Segments”, applicable from 1 Janu- however, expansion has nevertheless continued in selected growth ary 2009, the segment previously known as Passenger Transporta- markets. For instance within the scope of its cooperation with the tion, which has been renamed Passenger Airline Group, is present- Latin American TACA, from 1 April 2009 Lufthansa offers daily ed without the centralised Group functions. The operating result for code-sharing connections to Peru and El Salvador as well as a the new segment was adjusted accordingly for the same period further 17 connections each both from Lima and San Salvador to last year and increased by EUR 15m as a result. The application destinations in Central and South America. Lufthansa is continu- of IFRIC 13 (“Customer Loyalty Programmes”) had the opposite ing the targeted expansion of its route network in Eastern Europe, ­effect and reduced the result by EUR 16m. In accordance with this too. Growth will be primarily towards and to the Ukraine standard, which is binding from 1 January 2009, air miles distrib- and Croatia. In addition new routes have been introduced from uted as part of bonus miles programmes and as yet unused are Düsseldorf to Inverness and Venice. In the Middle East and Africa to be recognised at fair value using the deferred revenue method. Lufthansa is also extending its route network and flight capacity in In the interest of comparison, the figures for the same period last cooperation with its partners EgyptAir, Ethiopian and South African.

Lufthansa 1st Interim Report January–March 2009 11 For the third time in a row SWISS was voted Best Airline in Euro­ pean Traffic by the readers of the renowned Business Traveller magazine in 2009. SWISS was awarded top marks in the catego- ries in-flight service, cabin crew, ground/lounge service, cabin Lufthansa Italia began scheduled services on 2 February. The first comfort and seat pitch. SWISS also won the Skytrax 2009 World flights took place from Milan to and and since Airline Award as “Best Airline in Europe” for short and long-haul March have included flights to Brussels, Budapest, Bucharest­ and flights. . Inner-Italian routes are also to be offered from April. The next expansion of the route network is planned for the summer Operating performance The airlines in the Passenger Airline flight timetable with new services to and . Within just Group were not able to escape the general trend of declining four weeks the new brand Lufthansa Italia has established a strong passenger numbers in global air traffic. With 15.0 million passen- foothold in the market. Two additional Airbus A319s are to be gers (of which 3.0 million flew with SWISS), Lufthansa and SWISS transferred to Northern as a result. Additionally,­ since the end reported a fall of 6.0 per cent. SWISS was initially largely able to of March three of the six daily flights to London­ are served by the maintain its successful performance from the previous year. In Lufthansa Group equity participation British Midland (bmi). February and March though, it too recorded declining passenger numbers. The summer flight timetable at SWISS includes direct flights to Lyons and Oslo as well as new code-sharing flights from Zurich to Lufthansa Passenger Airlines reduced their capacity in the first Malta and from Geneva to Montreal and Washington. The direct quarter by 3.3 per cent year on year, and sales fell by 7.2 per cent. flight from Zurich to Tripoli was cancelled, however, and flights from The passenger load factor sank as a result by 3.1 percentage São Paulo to Santiago de Chile as well as the connection to Singa- points to 74.1 per cent. In the same period SWISS increased its pore are now covered by partners of SWISS. In total SWISS will be cap­acity by 3.4 per cent, focussing its expansion on the Europe flying to 90 destinations in 42 countries in the summer. traffic region. The passenger load factor was 3.6 percentage points lower at 73.2 per cent. This meant that the overall load factor for As part of the Lufthansa Group’s aim of sustainably modernising both airlines was 74.0 per cent (–3.2 pp). its fleet, the Supervisory Board approved the order of 30 C Series short-haul aircraft from Bombardier for SWISS. The new planes The drop in demand was accompanied by a tangible change in have around 115 seats and will replace the existing Avro RJ100 travellers’ habits. Despite the positive effects on average yields regional aircraft from 2014 as well as offering potential for growth from exchange rate movements (+1.5 per cent) and different fuel in this segment. With the C Series SWISS can reduce its fuel con- surcharges (+2.0 per cent), the average yields sank due to “pas- sumption compared with the Avro fleet by more than 25 per cent. senger migration” from the premium segment (First and Business Class) to the and increased redemption of bonus Lufthansa is also investing in product development with a focus miles. They slumped by 5.7 per cent in the first quarter. on sustainable development and its positioning as a premium car- rier. Three new lounges have been opened in Frankfurt since the In January SWISS reduced its fuel surcharges again as a further beginning of the year. The functionality of the mobile boarding pass concession to price developments on the market for crude oil and has also been expanded. In addition to broadening the online and kerosene. For SWISS long-haul flights the surcharge was cut by mobile services by installing new check-in machines, Lufthansa CHF 30 to CHF 114 per flight segment. For European flights it went has invested in additional products which make it faster and easier down by CHF 7 to CHF 29 per flight segment. for customers to start their journey. All traffic regions were affected by the economic crisis. In the With an eye to continuing in-flight product improvement, two of the European home market both sales and passenger numbers fell three Lufthansa business jets operated by PrivatAir for Lufthansa considerably. SWISS in contrast was able to increase sales in this will be equipped with additional Economy Class seats from late traffic region. The passenger load factor for the segment went summer 2009. On the routes Frankfurt–Bahrain and Frankfurt– down overall by 2.7 percentage points to 63.6 per cent. Average Dammam there will then be 32 seats in Business Class and yields followed suit, contracting by 7.5 per cent. Traffic revenue in 60 seats in Economy Class. this region was 13.0 per cent below last year’s.

12 Lufthansa 1st Interim Report January–March 2009 To our shareholders I Interim management report I Interim financial statements I Notes to the financial statements Passenger Airline Group segment

In the Americas traffic region the fall in passenger numbers could not be fully absorbed, although capacity was cut sharply. The pas- senger load factor decreased by 3.1 percentage points to 79.0 per cent. Average yields fell 3.4 per cent year on year and traffic The fall in revenue stemmed from 6.3 per cent lower sales vol- revenue dropped by 11.1 per cent. umes, and prices had an influence of –6.5 per cent. Exchange rate movements, however, improved traffic revenue by 1.3 per cent. In the Asia/Pacific traffic region SWISS was able to report an increase in passenger numbers, though Lufthansa recorded fewer Other operating income rose by EUR 191m to EUR 364m, princi- passengers. Altogether the passenger numbers and sales fell fur- pally due to higher exchange rate gains compared with last year ther at already reduced capacities. The passenger load factor sank and compensation for damages for the Internet system Flynet by 3.4 percentage points but remained high at 80.6 per cent. Aver- cancelled by Boeing. Total operating income declined by 6.4 per age yields shrank by 9.4 per cent and traffic revenue also slumped cent to EUR 4.0bn. sharply (–14.4 per cent). Operating expenses were successfully cut by 4.9 per cent year on The Middle East/Africa traffic region put in a relatively moderate year to EUR 4.0bn. This reduction is largely due to the consider­ performance in the first quarter. Passenger numbers and load fac- able fall in the cost of materials and services to EUR 2.3bn tor sank here too, but by less than elsewhere. Average yields rose (–6.7 per cent). The major driver was the 27.7 per cent fall in fuel by 4.2 per cent and traffic revenue by 2.5 per cent. costs to EUR 675m. Fees and charges dropped slightly by 0.7 per cent to EUR 753m. The performance figures for Germanwings were also below last year’s due to reductions in capacity. Passenger numbers came to Staff costs rose by 3.5 per cent as a result of wage agreements 1.4 million (–12.9 per cent), and the load factor fell by 4.2 percent- to EUR 771m. The number of employees only went up slightly by age points to 74.3 per cent. Germanwings reduced its capacity in 0.4 per cent to 46,070 on average for the year. The hiring freeze for the first three months by 12.9 per cent. the business segment is still in place.

Revenue and earnings development As a result of the negative Depreciation and amortisation increased due to additional aircraft trend in traffic figures in the first three months, traffic revenue was purchases last year by 6.5 per cent to EUR 229m. not able to match last year’s high level and declined to EUR 3.3bn (–11.5 per cent). SWISS contributed EUR 604m to the total, up year Other operating expenses fell by 10.4 per cent due to lower ­agency on year by 0.2 per cent. Germanwings generated traffic revenue of commissions and positive exchange rate effects from operating EUR 95m (–8.7 per cent). hedges to EUR 670m.

Trends in traffic regions ­­Lufthansa ­­­ Passenger Airlines and Swiss International Air Lines AG Number of passengers Available seat-kilometres Revenue passenger-­kilometres Passenger load factor in thousands in millions in millions in % Jan. – Change Jan. – Change Jan. – Change Jan. – Change March 2009 in % March 2009 in % March 2009 in % March 2009 in pts Europe 11,579 – 6.0 13,689 – 2.1 8,709 – 6.0 63.6 – 2.7 America 1,549 – 7.8 14,606 – 4.3 11,534 – 8.0 79.0 – 3.1 Asia/Pacific 1,160 – 5.9 11,138 – 1.4 8,974 – 5.5 80.6 – 3.4 Middle East/Africa 742 – 1.7 4,745 3.7 3,457 – 1.6 72.9 – 3.9 Total scheduled services 15,030 – 6.0 44,179 – 2.1 32,674 – 6.1 74.0 – 3.2 Charter 3 – 35.8 10 – 58.2 6 – 62.2 67.6 – 7.2 Total 15,033 – 6.0 44,188 – 2.1 32,681 – 6.2 74.0 – 3.2

Lufthansa 1st Interim Report January–March 2009 13 The operating result dropped sharply by EUR 67m from last year’s high level and posted a loss of EUR 30m. SWISS contributed an operating profit of EUR 42m to the Passenger Airline Group segment.

Other segment income rose by EUR 15m to EUR 23m. Other seg- Logistics business segment ment expenses came to EUR 4m (last year: EUR 0m). The result of the equity valuation was EUR 6m higher than last year (EUR –13m) Logistics due to an improved result at SunExpress. The segment result fell Jan. – Jan. – Change March March in % overall by EUR 50m to EUR –24m. 2009 2008 Revenue €m 469 682 – 31.2 Segment capital expenditure was 13.9 per cent higher than last - of which with companies year at EUR 558m as a result of aircraft deliveries. In the first three of the Lufthansa Group €m 7 7 0.0 months of the year the Passenger Airline Group segment put two Operating result €m – 72 46 – Airbus A340-600s, one Airbus A330, eight aircraft from the Airbus Segment result €m – 66 51 – A320 family, four Embraer 195s and two Cessna Citations into EBITDA €m – 37 81 – service. Segment capital ­expenditure €m 4 5 – 20.0 Outlook The market environment for passenger traffic remains Employees as of 31.3. number 4,644 4,573 1.6 difficult and there are still no signs of an end to the current weak thousand demand. Freight and mail tonnes 328 429 – 23.4 Available cargo tonne-­kilometres millions 2,786 2,963 – 6.0 Lufthansa and its partners in the Airline Group monitor develop- Revenue cargo ments closely and take action as needed on the basis of pre- tonne-­kilometres millions 1,604 2,060 – 22.1 defined phased plans. This puts Lufthansa in a position to track Cargo load factor % 57.6 69.5 – 11.9 pts changes in demand closely and adjust capacity and revenue plan- ning to the respective sales situation. This is aided by a high level of flexibility in capacity planning and the largely unencumbered Course of business ­Lufthansa Cargo reported a dramatic fall in Group fleet. Lufthansa is equally prepared for a further drop in revenue and an operating loss in the first quarter 2009. To counter demand and for the opportunities which would arise if competitors the effects of the economic crisis, a programme to safeguard earn- left the market. ings has been set up, capacities have been cut considerably and short-time work have been introduced at the sites in Germany. As part of their phased plan Lufthansa Passenger Airlines in April again adjusted their capacities in line with developments in Segment structure The Logistics segment includes Lufthansa demand. For the summer flight timetable a decision was taken Cargo AG as well as Lufthansa Cargo Charter Agency GmbH, the to cut capacity in European traffic by around 6 per cent (exept container airfreight specialist Jettainer GmbH and the equity invest- Lufthansa Italia) compared with last year. Including this step, a total ment in Jade Cargo International Ltd. At the beginning of the year of 22 aircraft are being retired from the network. This means that Lufthansa Cargo AG took over the business of its wholly owned the segment’s total capacity for the 2009 financial year is currently subsidiary cargo counts GmbH. down by 1.1 per cent. Product and route network The global economic and financial The Passenger Airline Group is still assuming a drop in revenue for crisis is hitting the transportation industry very hard. To mitigate its 2009 and a considerably lower operating profit. effects, two MD-11 cargo aircraft were decommissioned at the end of the first quarter and freighter capacities equivalent to two more The medium-term growth strategy is still being pursued in paral- MD-11 freighters were withdrawn. This corresponds to a reduction lel in order to strengthen the multi-hub/multi-brand Group. The in MD-11 capacities of around 20 per cent. segment is therefore investing in further modernisation of the fleet and new product development. For these reasons the ongoing At the same time external capacities from World Airways (one MD- transactions to acquire Austrian Airlines, British Midland (bmi) and 11, one B747-400) were returned and partially replaced by Boeing Brussels Airlines are continually being advanced. 747-400s from Jade Cargo International.

14 Lufthansa 1st Interim Report January–March 2009 To our shareholders I Interim management report I Interim financial statements I Notes to the financial statements Logistics business segment

Lufthansa Cargo continues to work hard to generate new business and acquire additional volumes for the existing network. It has de- veloped its operations in Italy for instance and since mid-February has offered freighter flights from Milan to New York and Chicago. An MD-11 freighter now takes off twice a week from Milan-Mal­ pensa airport. Since the end of March Lufthansa Cargo has also been flying to the Vietnamese capital of Hanoi. The direct connec- tion to the metropolis of six million people is offered once a week. All traffic regions were hit by the fall in demand. Although cap­ In addition, Hyderabad and Malta have also been included in the acities were reduced sharply the load factor declined in all traffic range as new freighter destinations. regions. In the Americas traffic region the economic slump was felt particularly keenly. In Asia the comparatively poor cargo load factor The combined air/sea-freight transport to Australia offered by was partially the result of the effects of the economic crisis, but Lufthansa Cargo in close cooperation with Jade Cargo Internation- also of enormous competitive pressure. Even in the smallest traffic al since early January has been well received by the market. region, Middle East/Africa, the available capacity was only partially sold in the market. Lufthansa Cargo also ranked very highly in the new Air Cargo Excellence survey (ACE). The readers of the Air Cargo World In addition to the capacity reductions, other measures were magazine rated 93 cargo airlines according to various criteria. adopted to safeguard earnings in response to the exceptionally dif- Lufthansa Cargo took second place. It received excellent marks in ficult conditions. Since 1 March 2009 short-time work have applied the areas of customer service, IT and performance in particular. It for some 2,600 ground staff at Lufthansa Cargo in Germany. The was also certified under the international environmental norm ISO agreement was signed initially for twelve months up to 28 Febru- 14001 for its comprehensive environmental management system at ary 2010. Managers and Executive Board members are voluntarily the beginning of 2009. waiving part of their pay. A works agreement was also signed on equivalent part-time work for on-board staff. As part of the cost- In order to keep refining its products and cost-effectiveness, cutting programme the budgets for other operating costs were also Lufthansa Cargo and Jettainer have started a series of tests with reduced by 80 per cent in February 2009. lightweight containers. The tests are aimed at reducing the weight of airfreight containers by 15 per cent and thereby to improve Revenue and earnings development Traffic revenue for the environmental performance and cut transport costs for Lufthansa ­Logistics segment dropped sharply by 31.7 per cent to EUR 448m. Cargo. This reflects both unsold volumes and increasing pressure on aver- age yields. Operating performance Lufthansa Cargo reduced its total cap­ acity (freighters, belly capacities and trucks) by 6.0 per cent in the Other operating income rose to EUR 35m (last year: EUR 19m). first three months of 2009. As volumes fell by 22.1 per cent at the The increase stems mainly from currency gains on foreign same time, the cargo load factor dropped by 11.9 percentage exchange translation and other non-periodic income from staff points to 57.6 per cent. secondment.

Trends in traffic regions ­Lufthansa­­ Cargo Freight/mail Available cargo tonne-­kilometres Revenue cargo tonne-­kilometres Cargo load factor in thousand tonnes in millions in millions in % Jan. – Change Jan. – Change Jan. – Change Jan. – Change March 2009 in % March 2009 in % March 2009 in % March 2009 in pts Europe 121,482 – 27.8 211 – 17.0 93 – 22.1 44.3 – 3.0 America 89,044 – 27.9 1,069 – 11.8 627 – 28.0 58.6 – 13.2 Asia/Pacific 89,432 – 18.2 1,236 – 0.4 730 – 20.6 59.1 – 15.0 Middle East/Africa 28,219 2.2 271 5.5 154 2.8 56.9 – 1.5 Total 328,178 – 23.4 2,786 – 6.0 1,604 – 22.1 57.6 – 11.9

Lufthansa 1st Interim Report January–March 2009 15 Outlook In light of the global economic crisis, the situation in the Overall, Lufthansa Cargo reported total operating income of airfreight industry has deteriorated further in recent weeks. For the EUR 504m (–28.1 per cent). first time in many years, 2009 did not see an increase in demand just before the Easter holidays. Demand and load factor still de- Operating expenses were cut by 12.1 per cent, coming to velop negatively. EUR 576m. A major contribution came from the lower cost of materials and services. Fuel expenses went down by 48.4 per cent Lufthansa Cargo is therefore extending the previously implemented to EUR 64m as a result of prices and volumes. cost-cutting measures. Another two MD-11 cargo aircraft are to be retired by 1 October 2009. In parallel Lufthansa Cargo is reducing With reduced capacities and 33 per cent fewer flight movements, the amount of capacity purchased from Jade Cargo International. fees and charges also fell by 21.9 per cent to EUR 57m. MRO As of 1 June 2009 Lufthansa Cargo will only deploy Jade cap­ expenses were 6.9 per cent up on last year at EUR 31m. The main acities of up to three Boeing 747-400s in its own network. Budgets reason was higher maintenance intensity, especially for engine for other operating costs have been cut again – to 75 per cent as overhauls. of 1 May. The short-time work regime for ground staff in Germany is to be expanded as of 1 May 2009. Staff costs were brought down by 1.3 per cent year on year to EUR 78m. The steps initiated as part of the programme to safe- Although focused sales activities in recent months were able guard earnings (e.g. running down overtime accounts and the to generate additional business, Lufthansa Cargo now expects accompanying reduction in the provision for flexible overtime, de- revenue for this financial year to be well below last year’s and is creasing extra pay for overtime and the first effects of the short-time anticipating a substantial operating loss. work in place since March) more than offset the wage increase for ground staff and increased staff numbers. In the first quarter Lufthansa Cargo had 4,644 employees, an increase of 1.6 per cent MRO business segment compared with last year. MRO Depreciation and amortisation was stable year on year at EUR 30m. Jan. – Jan. – Change March March in % 2009 2008 Other operating expenses were successfully cut by 7.3 per cent to Revenue €m 1,093 913 19.7 EUR 89m. The reduction in other travel and staff costs, rental and - of which with companies of maintenance costs and agency commissions was partly absorbed the Lufthansa Group €m 463 387 19.6 by higher exchange rate losses from foreign currency translation. Operating result €m 61 71 – 14.1 Segment result €m 61 71 – 14.1 Lufthansa Cargo had to report a first quarter operating loss of EBITDA €m 73 96 – 24.0 EUR 72m. This represents a considerable drop of EUR 118m com- Segment capital expenditure €m 29 20 45.0 pared with the same period last year. Employees as of 31.3. number 19,784 18,881 4.8

The segment result was EUR –66m and therefore EUR 117m ­below last year’s. In addition to the operating result this also Course of business The collapse in demand in the aviation includes the result of the equity valuation of EUR 1m (last year: industry has led many airlines to make sharp cuts in capacity: 226 EUR 4m). This mainly reflects the equity investments in Shanghai aircraft deliveries have been postponed so far, 12 per cent of the Pudong Inter­national Airport Cargo Terminal. world fleet has been decommissioned and the remainder is being used less. As a result global demand for maintenance, repair and Segment capital expenditure was EUR 1m below last year’s at overhaul (MRO) services sank in 2009 – despite additional aircraft EUR 4m. being delivered. In addition to dwindling demand and increased

16 Lufthansa 1st Interim Report January–March 2009 To our shareholders I Interim management report I Interim financial statements I Notes to the financial statements MRO business segment

Spairliners, a joint venture between and Air pricing pressure from clients, the airlines’ payment practices – France Industries, was successfully launched with a component­ including defaults – weigh on MRO providers’ results and liquid- supply contract for the first Airbus A380 from the Australian airline ity. The Lufthansa Technik group was nevertheless able to report Qantas. The technical services for the second largest A380 growth, increasing revenue by 19.7 per cent against the trend. The customer in the world include repairs and access to Spairliners’ operating result still fell compared with 2008, however, due to a extensive warehouse. record date effect in inventory valuation. Operating performance In terms of external business Lufthansa Segment structure The MRO group includes 32 technical main- Technik acquired nine new clients in the first quarter and 178 add­ tenance operators worldwide. The company also holds direct and itional contracts with an expected revenue volume of EUR 244m indirect stakes in 56 companies. for the whole year 2009. This increased the size of the aircraft fleet serviced by Lufthansa Technik by 9 per cent to 1,787 worldwide. Lufthansa Technik has reorganised its international maintenance For instance, a Total Material Operations contract was signed with business and since 1 January 2009 it has been combined at Sama Airlines from Saudi Arabia. This means that for the next Lufthansa Technik Maintenance International GmbH in Frankfurt seven years Lufthansa Technik will be responsible for supplying (LTMI), which was previously known as Condor/Cargo Technik materials and engineering services for the growing Boeing 737- GmbH. The wholly owned Lufthansa Technik subsidiary has around 300 fleet at Sama Airlines. 1,000 staff and has been turned into a proven centre of excellence for maintenance services for external clients. At the same time LTMI A ten-year Total Technical Support (TTS) contract was also signed opened a maintenance station in Milan in the first quarter to service with the new company AeroLogic GmbH for up to eleven Boeing the Lufthansa Italia fleet locally. 777Fs.

Products Lufthansa Technik is the MRO world market leader Lufthansa Technik also signed other contracts with Bombardier and in the field of civil aircraft, with a portfolio ranging from the latest Airbus. Airbus is to offer its clients the emergency exit route mark- repair procedures through to individual completion programmes ing systems from Lufthansa Technik as standard equipment for its for VIP aircraft. In the first quarter 2009 it brought maintenance passenger aircraft. capacities up to date and expanded them with the opening of the engine overhaul centre in Hamburg. Lufthansa Technik Malta Revenue and earnings development In the first quarter added to its aircraft overhaul capacity by opening a new hangar Lufthansa Technik increased its revenue from external clients by complex and will be able to carry out overhaul work and paint EUR 104m to EUR 630m (+19.8 per cent). Revenue from clients jobs for up to two wide-bodied aircraft in two additional hangars within the Lufthansa Group grew by almost the same amount, up in future. Furthermore, Lufthansa Technik strengthened its position 19.6 per cent to EUR 463m, due to the larger fleet as well as an as an innovative supplier of cabin products by inaugurating the increased number of aircraft rest periods and engine upgrades research and development centre for the Cabin Innovation division – compared with 2008. Altogether, revenue went up by EUR 180m for instance by improving the innovative Aerostretcher system for (+19.7 per cent) to EUR 1.1bn. External revenue as a proportion of transporting supine patients safely. It was also able to build on its total revenue remained stable year on year at nearly 58 per cent. reputation within the target group of VIP and business jet clients. At the Aircraft Interiors Expo, the world’s largest trade fair for aircraft Other operating income fell, largely due to considerably lower cabin design and systems technology, another product from the exchange rate gains, by EUR 35m to EUR 31m. The MRO seg- Cabin Innovation Center, “niceview”, won the Crystal Cabin Award ment therefore generated total operating income of EUR 1.1bn 2009 in the category “Entertainment and communications”. (+14.8 per cent).

Lufthansa 1st Interim Report January–March 2009 17 IT Services business segment

IT Services Jan. – Jan. – Change March March in % 2009 2008 Operating expenses climbed by EUR 155m (+17.1 per cent) to Revenue €m 148 153 – 3.3 EUR 1.1bn. The cost of materials and services accounted for the - of which with companies largest rise, going up by EUR 128m (+27.5 per cent) to EUR 594m. of the Lufthansa Group €m 87 91 – 4.4 In addition to the material-intensive revenue growth in the engine Operating result €m 2 11 – 81.8 maintenance division and the adverse effects of the stronger US Segment result €m 2 11 – 81.8 dollar, this also reflects increased outsourcing to the expanded EBITDA €m 13 20 – 35.0 Lufthansa Technik group as well as a record date effect in inventory Segment capital expenditure €m 17 12 41.7 evaluation. Employees as of 31.3. number 3,059 2,968 3.1

The number of staff also changed substantially. As of 31 March 2009 the figure rose by 903 compared with the same quarter last Course of business Business at in the first year to 19,784. This was the result of integrating Lufthansa Technik quarter 2009 was depressed by distinct restraint worldwide in Switzerland GmbH with 503 employees, 244 additional vocational terms of IT projects as well as by falling prices and volumes due trainees and a slight rise in numbers at Lufthansa Technik AG and to the global economic crisis. Revenue and result are thus below Shannon Aerospace. Staff costs went up accordingly by EUR 14m last year’s. Lufthansa Systems is countering this trend by making (+5.5 per cent) to EUR 267m. the cost base more flexible, reducing overhead costs and moving production activities abroad in order to save costs. Depreciation and amortisation rose by EUR 1m to EUR 21m. Segment structure ­In addition to its head offices in Kelsterbach, Other operating expenses increased, primarily as a result of cur- Lufthansa Systems has several sites in Germany and 16 other rency measurement on the reporting date, by EUR 12m (+7.1 per countries. The company’s participation as a minority shareholder of cent) to EUR 181m. Lufthansa Systems Indonesia, based in Jakarta, has however been ended. The 49 per cent stake in the company was sold in the first In comparison with the first quarter 2008 the effect of the record quarter of 2009 to the majority shareholder Garuda Indonesia. date reduced the operating result and the segment result by EUR 10m year on year to EUR 61m. Products As the financial position of many airlines is deteriorat- ing, they are particularly interested in products which have tangible The purchase of an additional reserve engine meant that capital positive effects on costs or revenue such that IT investment pays expenditure was EUR 9m higher than last year. Segment capital for itself within a short period of time. These solutions are a particu- expenditure for the quarter came to EUR 29m in total. lar strong point of Lufthansa Systems’ product range. They include above all the flight planning solution Lido OC and the financial Outlook Although the crisis is having a delayed impact on the management solution Sirax AirFinance Platform, but also products MRO sector, affecting certain plants in the Lufthansa Technik in the area of crew management and aircraft handling. group, Lufthansa Technik is still expecting revenue growth for the full year. However, matching the very good 2008 result seems an Operating performance In the first quarter 2009 Lufthansa Sys- ambitious target, despite the programmes already launched to tems signed new contracts with several airlines. For instance the make capacity more flexible, cut costs and increase efficiency – Italian aviation group - is to use several products also as part of the Group initiative Upgrade to Industry Leadership. from Lufthansa Systems’ flight operations portfolio in future. The

18 Lufthansa 1st Interim Report January–March 2009 To our shareholders I Interim management report I Interim financial statements I Notes to the financial statements IT Services business segment

Dutch low-cost carrier transavia.com also chose the navigation maps from Lido RouteManual at the beginning of the year. In addition, Ethiopian Airlines is to manage data traffic between its sites around the world using the Managed Network Service from Staff costs went up by 7.3 per cent to EUR 59m as a result of a Lufthansa Systems. slight increase in numbers by 3.1 per cent to 3,059 and wage increases. In the regional flight sector too, Lufthansa Systems was able to develop its position. KLM cityhopper, for example, renewed the Depreciation and amortisation were stable year on year at EUR 9m. contract for NetLine products used for crew planning and optimis- ing operations for another three years. City Airline from Other operating expenses increased due to rising energy costs and chose the revenue management solution ProfitLine/Yield, whose adverse foreign exchange effects to EUR 73m (+4.3 per cent). special “Rembrandt” version is tailored to the needs of smaller airlines and regional carriers. The operating result for Lufthansa Systems sank considerably to EUR 2m (last year: EUR 11m). It was burdened by pre-production Revenue and earnings development The global economic crisis costs in the project business as well as by price adjustments and resulted in a year-on-year decline in revenue. In the first three declining margins. months of the 2009 financial year Lufthansa Systems recorded total revenue of EUR 148m (–3.3 per cent compared with last Segment capital expenditure of EUR 17m (+41.7 per cent) was year). Lufthansa Group companies account for EUR 87m (–4.4 per aimed primarily at safeguarding existing business. The rise in cap­ cent) and external clients for EUR 61m (–1.6 per cent). Revenue ital expenditure compared with last year was required to revise and from Lufthansa Group companies is below last year’s due to the modernise the product portfolio. demigration of IT services and lower passenger numbers. In the external market, falls in prices and volumes were largely made up Outlook Gloomier market conditions resulting from the financial for by new business in the areas of Airline Management Solutions crisis continue to erode the airlines’ inclination to invest in the field and Industry Solutions. of IT. However, as information technology exerts a great deal of leverage in the optimisation of business processes, market oppor- Other operating income rose year on year by 44.4 per cent to tunities do exist as well. Demand for IT systems which contribute to EUR 13m. This is largely due to work in progress in connection direct cost savings or revenue increases are of great significance. with ongoing client business and the modernisation of Lufthansa Lufthansa Systems is well positioned in this product segment. The System’s product portfolio. Total operating income was EUR 161m, integrated platform solutions are also receiving a positive response or just below the figure for last year (–0.6 per cent). from the market.

Total operating expenses came to EUR 159m in the first quarter For cyclical reasons revenue is expected to experience a tempor­ 2009 and were therefore 5.3 per cent higher than last year. ary downturn in 2009. Steps have therefore already been initiated to safeguard the result and make costs more flexible. Operat- The cost of materials and services rose by 5.9 per cent to ing costs have been cut, a hiring freeze has been implemented EUR 18m. This was principally due to the more extensive use of ex- throughout the company and holiday and overtime accounts are ternal staff and increased purchasing of additional services within being run down. The current focus is on a substantial reduction in the scope of Lufthansa Passenger Airlines’ and Lufthansa Cargo’s costs for external staff. For the full year 2009 a positive operating operator model. result, though lower than last year, is still expected.

Lufthansa 1st Interim Report January–March 2009 19 Catering business segment trends the focus is on the environment; preference is given par- ticularly to natural, recyclable and weight-saving materials. For the Catering first time, LSG Sky Chefs has also organised an internal innovation Jan. – Jan. – Change competition to improve processes and optimise its own service March March in % 2009 2008 portfolio. Revenue €m 498 528 – 5.7 Operating performance Despite the difficult market conditions - of which with companies of the Lufthansa Group €m 111 131 – 15.3 LSG Sky Chefs was able to strengthen its customer base in the first Operating result €m 21 5 320.0 three months of the financial year. Key contracts with TUI Group, Segment result €m 21 19 10.5 Lufthansa Italia, British Airways, Condor and Virgin Atlantic were EBITDA €m 57 – 9 – successfully renewed or signed for individual locations. Segment capital expenditure €m 14 20 – 30.0 In response to tangible falls in demand at nearly all plants, LSG Employees as of 31.3. number 29,608 30,423 – 2.7 Sky Chefs froze all new recruitment and investment across the board. The Company is also using all opportunities to reduce staff Course of business The persistent economic crisis and the cap­acities and make them more flexible: outside staff were scaled resulting fall in passenger numbers led to a drop in demand for back, flexitime and holiday accounts were run down and short- catering products and in-flight management services in the first time work was introduced in some plants in Germany. Smaller, three months. Volumes and revenue in the Catering segment are decentralised plants in the USA were also closed. At the same time therefore lower than last year. Despite this, the operating result for the long-term, broad-based “Lean” initiative is being pursued with the first three months is higher than last year due to the non-recur- renewed vigour. Its success is reflected in lower costs and a sharp ring effect of a settlement before an arbitration tribunal concerning improvement in quality and customer satisfaction figures. a D&O insurance policy. Revenue and earnings development The Catering segment Segment structure The LSG Sky Chefs group consists of some reported a year-on-year fall in revenue in the first three months of 128 companies, with plants at more than 200 sites in 50 countries. 5.7 per cent to EUR 498m. This is largely due to capacity reduc- The focus at LSG Sky Chefs is on developing the core business tions at the airlines and lower volumes as a result. segment of airline catering, in-flight equipment and in-flight man- agement. To this end LSG Sky Chefs made equity investments in External revenue only sank by 2.5 per cent to EUR 387m due other companies in the first quarter 2009 and founded new ones, to additional business and positive exchange rate movements. such that the group of consolidated companies grew by seven new Internal revenue fell by 15.3 per cent to EUR 111m as a result of subsidiaries. The acquisition of three companies in North-Eastern lower volumes, price cuts and passenger migration from premium Brazil, a region with high growth rates in tourism, strengthens LSG classes to Economy Class. The companies consolidated for the Sky Chefs’ position in Latin America. The new companies make first time in the LSG Sky Chefs Group made a contribution to rev- a positive contribution to revenue and earnings at LSG Sky Chefs enue of EUR 19m in total. Group. In Europe the fall in revenue especially affected Germany, Scandi- Products The LSG Sky Chefs product portfolio ranges from the navia and Britain. In the USA revenue in euros went up consider- development, procurement and logistics of in-flight service articles ably due to exchange rate movements, although US dollar-based to the management of all upstream and downstream in-flight revenue sank. Revenue in the Asia/Pacific region and Latin service processes. In collaboration with its clients LSG Sky Chefs America also went up on a euro basis compared with last year. identifies sector trends. The client’s requirements are defined and However, current events in the airline industry have also caused new products and services designed jointly. In addition to culinary revenue to fall in the Solutions division.

20 Lufthansa 1st Interim Report January–March 2009 To our shareholders I Interim management report I Interim financial statements I Notes to the financial statements Other

Outlook Pressure on the result remains high, as the entire airline Other operating income went up to EUR 69m (+187.5 per cent), catering market will continue to contract. Lower volumes due to primarily due to a settlement before an arbitration tribunal on the flight cancellations and the use of smaller aircraft affect LSG Sky D&O policy for the SAS contract in Scandinavia (EUR 40m), as well Chefs, as does the tangible passenger migration from the pre- as positive exchange rate movements. This took total operating mium classes to Economy Class and cuts in in-flight service by income up by 2.7 per cent to EUR 567m. many airlines. The number of flights and meals is still falling at a double-digit rate in nearly all 200 sites worldwide. A slump in one Total operating expenses were stable year on year at EUR 546m. region can therefore no longer be balanced out by an upswing in Despite increased food prices worldwide last year, higher energy other regions. There is currently no sign that this trend is flattening costs and the resurgent US dollar, the cost of materials and ser­ out. Despite the severely constrained capital expenditure policy vices fell due to lower volumes by 3.8 per cent to EUR 225m. the Company is continuing to develop its future actively in growth markets via management contracts and joint ventures. However, In the first three months of the year LSG Sky Chefs Group had an these moderate expansion activities alone cannot make up for the average of 29,608 employees (–2.7 per cent). Staff costs went falls in volumes. Considering the additional short and long-term down by 0.5 per cent to EUR 201m. The negative effect of the programmes introduced to optimise costs and the effects of the stronger US dollar was more than offset by higher productivity in arbitration ruling, the expectation is that last year’s operating result the operating areas and lower administrative costs. can be matched despite the decline in revenue.

Depreciation and amortisation was approximately EUR 1m above Other last year’s at EUR 14m (+7.7 per cent). Higher depreciation on the new catering facility at Frankfurt airport contributed to the rise. Other Jan. – Jan. – Change March March in % Other operating expenses went up year on year by 8.2 per cent 2009 2008 to EUR 106m. This is largely the result of adverse exchange rate Total operating income €m 314 289 8.7 movements. Operating result €m – 29 7 – Segment result €m – 29 8 – The operating result improved overall, coming to EUR 21m, or EBITDA €m – 11 – 19 42.1 EUR 16m more than last year. This reflects lower catering volumes Segment capital expenditure €m 32 11 190.9 as mentioned, but also the positive one-off effect of the arbitration settlement on the D&O insurance policy. Employees as of 31.3. number 3,675 3,569 3.0

The decline in other segment income to EUR 1m (last year: Structure/change in reporting standards As a result of IFRS 8 EUR 12m) is largely the result of gains realised last year on the dis- “Operating Segments”, which is applicable from 1 January 2009, posal of the Spanish subsidiary LSG Sky Chefs España S.A. Other the segment reporting has been structurally adapted to the reports segment expenses were EUR 2m higher than last year at EUR 2m. regularly presented to decision makers within the Group. The seg- Overall, the segment result went up by 10.5 per cent to EUR 21m. ment Other therefore now includes the Service and Financial Com- panies where Lufthansa’s equity investments are held (Lufthansa Segment capital expenditure came to EUR 14m and was therefore Flight Training, AirPlus, Lufthansa Commercial Holding, etc.) and EUR 6m lower than last year. The main reasons for the fall was the also the centralised Group functions of Deutsche Lufthansa AG. To capital expenditure made last year for the new catering facility at facilitate comparison, the figures for last year have been restated Frankfurt airport and for expanding global frozen food capacities in using the new parameters. More information can be found in the 2008. notes to the consolidated financial statements on page 30.

Lufthansa 1st Interim Report January–March 2009 21 Group-wide opportunity and risk controlling enables management to identify these in advance and thereby provides support for their efficient and effective management. Information on the opportun­ In the reporting period Lufthansa Commercial Holding acquired ity and risk management system, the risk categories and the risk Germanwings GmbH from Eurowings Luftverkehrs AG for a pur- situation at the Group can be found in the 2008 Annual Report on chase price of EUR 14.5m. pages 114 ff. and 183 ff.

Operating performance For AirPlus the first quarter was defined There have been no significant changes in the first three months by great restraint in business travel. Billing revenue was 12 per of 2009 in the opportunities and risks for the Group compared with cent down on the year, as cheaper rates are increasingly being those described in detail in the annual report. Some of the risks chosen. This was not without effect on the operating result, which described there have, however, become more concrete in recent was EUR 2m below the figure for last year. AirPlus received an months. For instance, the Group’s risk position is particularly af- important industry accolade for its climate protection solutions in fected by the global recession. With the exception of some emerg- the form of the “Best Practice Award 2009” from the Travel Industry ing markets (e.g. China or India), national economies are contract- Club. ing throughout the world. Overall, global gross domestic product is expected to sink by 2.5 percentage points in 2009. At the time The global crisis also affected demand for training services at the 2008 Annual Report was published, a fall of just 1.2 per cent Lufthansa Flight Training. The company’s aircraft simulators were was being forecast. Shrinking economic output means that global nevertheless operating at a satisfactory capacity and new contracts aviation traffic is also decreasing. Airfreight volumes in particu- were signed. Lufthansa Flight Training began construction work on lar have experienced a dramatic collapse worldwide. Lufthansa the extension for eight simulators at Frankfurt airport. In March it responded to these developments at an early stage by adjusting also inaugurated the simulator training centre in Munich. In order to flight capacities and taking steps to cut costs. The Company also mitigate the consequences of the worldwide crisis, Lufthansa Flight has sufficient flexibility to reduce capacities again if the situation Training has also introduced a more restrictive cost management. should deteriorate further. In the other business segments as well, resources are deployed individually in line with respective sales Income and earnings development Total operating income of expectations. the companies reported in this area came to EUR 314m (+8.7 per cent). The contribution from AirPlus made up around 20 per cent The prices for crude oil and aircraft fuel have declined sharply at EUR 63m. Lufthansa Flight Training contributed EUR 36m compared with their historic highs in mid-2008, but also compared (11.5 per cent) to income. Operating expenses rose by 21.6 per with the first quarter of 2008, resulting in considerable cost savings. cent to a total of EUR 343m. The operating result was negative at EUR –29m, which was exclusively a result of the newly included Counterparty risks are becoming more important, both in finan- Group functions. This also applies to the segment result, which fell cial markets and with regard to clients in the business segments. from EUR 8m last year to EUR –29m. Lufthansa tracks these risks on a continual basis and manages them according to the creditworthiness of the counterparty. Risk report As an international aviation company Deutsche Lufthansa AG is External finance is noticeably more expensive and harder to come exposed to sector-specific, company and financial risks. These by as a result of the international financial crisis. In this situation consist mainly of market and competition risks, which can affect Lufthansa’s investment grade rating and sound liquidity reserves capacity and load factors, strategy-related risks, political risks, give it a relatively good start and the Company was able to borrow operational risks, procurement risks, collective bargaining risks, IT considerable amounts on favourable terms in the first quarter. risks and financial and treasury risks. Lufthansa’s risk strategy al- lows to take advantage of business opportunities as long as a risk- Taking all known facts and circumstances into account, there are adjusted return can be realised on market terms and the risks are currently no risks which could jeopardise the Group’s existence in appropriate and acceptable within the framework of creating value. the foreseeable future.

22 Lufthansa 1st Interim Report January–March 2009 To our shareholders I Interim management report I Interim financial statements I Notes to the financial statements Supplementary report Outlook

Supplementary report In its meeting on 23 April the Supervisory Board appointed Chris- In the Euro-Zone, collapsing exports, falling property prices in toph Franz to the Executive Board as Deputy Chairman of the Ex- some Euro-States and the crisis of confidence which has spread ecutive Board of Deutsche Lufthansa AG with effect from 1 June from financial markets are expected to result in a contraction of 2009. He is responsible for the “Lufthansa Passenger Airlines” gross domestic product by 4.0 per cent for 2009. Germany is unit and in this capacity is also the Chairman of the Lufthansa expected to enter a severe recession in 2009, largely as a result Passenger Airlines Board. Christoph Franz’s successor as CEO of noticeable weakening in demand for exports. Weak export of SWISS with effect from 1 July 2009 will be Harry Hohmeister, growth is likely to, in turn, reduce investment activity. The German who is currently responsible for network and sales in the manage- economy is forecast to shrink by 4.8 per cent. ment board of SWISS. The new allocation of responsibilities for the Executive Board adopted simultaneously by the Supervisory In the medium term, oil prices are expected to rise again as the Board – with the four areas of responsibility Chairman and CEO, economy picks up. Futures contracts for delivery in December Lufthansa ­Passenger Airlines, Group Airlines and Corporate 2009 are trading at around USD 56.55/barrel for IPE Brent. The ­Human Resources as well as CFO and Aviation Services – reflects short-term outlook remains gloomy, however, due to the weakness Lufthansa’s development towards a group system of independent of the global economy and the expectation that recovery will be airlines. laborious.

Outlook For the full year 2009 IATA is forecasting a decline of 5.7 per cent General economy and industry At present there is no end to the in passenger numbers and even a fall of 13.0 per cent for freight. global economic downturn in sight. Monetary and fiscal measures In view of this sharp drop in demand IATA has also revised its earn- as well as steps towards restructuring and regulating the financial ings forecasts for the airline industry further downwards. For the markets have been taken throughout the world. These powerful current financial year losses in the industry are expected to worsen incentives should increasingly bear fruit, but the economic situation to USD –4.7bn (previously: USD –2.5bn). will probably only begin to improve in 2010. The main thrust of the state aid is to stabilise consumption and increase public spending ­Lufthansa­ Group The weak demand visible in the first three significantly. Altogether, the global economy is expected to shrink months and described in prior chapters has continued into the by 2.5 per cent in 2009. first weeks of the second quarter. There are currently no signs of a recovery. The Lufthansa Group is therefore preparing for a difficult In the USA the persistent turmoil on financial markets and their financial year. negative effects on the real economy continue to depress pros- pects. Spending by private households and companies is expected At the same time the Group benefits in this environment from its to remain slow in the months ahead, due largely to reduced strong business segments, which in some cases have different savings in private households, restricted availability of credit and business cycles. However, the future course of business remains uncertain employment prospects. The extensive stimulus pro- exposed to considerable risks. Flexibility in the capacity and cost grammes are expected to have a tangible effect on the economy base and quick reactions will therefore be decisive competitive in the upcoming quarters, however. The assumption is that gross factors and contribute to safeguarding the Company’s own profit- domestic product will fall by 3.5 per cent in 2009. ability. The business segments in the Lufthansa Group have these capabilities and will use them as required. The decline in revenue Given its strong dependence on exports and the persistently weak for the Group in its current composition expected for the full year demand from industrialised countries, Asia is not expected to re- 2009 will be accompanied by a substantial reduction in the operat- cover in 2009, too. Here, the economy is expected to shrink by 0.7 ing result compared with the previous year. The Executive Board per cent. Although growth is predicted for China in 2009 (+5.9 per nevertheless expects to earn a clearly positive operating result cent), this is the slowest rate since 1990. even in this environment.

Lufthansa 1st Interim Report January–March 2009 23 Consolidated income statement January – March 2009

Jan. – Jan. – in €m March 2009 March 2008 Traffic revenue 3,813 4,467 Other revenue 1,202 1,121 Total revenue 5,015 5,588

Changes in inventories and work performed by the enterprise and capitalised 69 74 Other operating income 704 545 Cost of materials and services – 2,871 – 3,048 Staff costs – 1,435 – 1,392 Depreciation, amortisation and impairment – 319 – 297 Other operating expenses – 1,227 – 1,245 Profit/loss from operating activities – 6 4 225

Result of equity investments accounted for using the equity method – 11 – 13 Result from other equity investments 11 9 Interest income 40 43 Interest expense – 108 – 83 Net interest – 68 – 40 Other financial items – 141 – 127 Financial result – 209 – 171

Profit/loss before income taxes – 273 54

Income taxes 21 – 7 Profit/loss after income taxes – 252 47

Minority interests – 4 – 3 Net profit/loss attributable to shareholders of Deutsche Lufthansa AG – 256 44

Basic earnings per share in € – 0.56 0.10 Diluted earnings per share in € – 0.56 0.10

24 Lufthansa 1st Interim Report January–March 2009 To our shareholders I Interim management report I Interim financial statements I Notes to the financial statements Consolidated income statement Consolidated statement of comprehensive income

Consolidated statement of comprehensive income

in €m 31.03.2009 31.03.2008 Profit/loss after income taxes – 252 47

Expenses and income without effect on profit and loss Currency translation differences – 29 41 Changes in accounting principles 0 – 354 Subsequent measurement of available-for-sale financial assets – 47 – 64 Subsequent measurement of cash flow hedges 202 – 166 Expenses and income without effect on profit and loss from financial ­investments accounted for using the equity method – 2 6 Other expenses and income without effect on profit and loss 0 – 4 Income taxes relating to components of other comprehensive income – 78 131 = Other comprehensive income after income taxes 46 – 410 = Total comprehensive income – 206 – 363 Total comprehensive income attributable to minority interests 5 – 1 = Total comprehensive income attributable to shareholders of ­ Deutsche Lufthansa AG – 211 – 362

Lufthansa 1st Interim Report January–March 2009 25 Consolidated balance sheet of 31 March 2009

Assets in €m 31.3.2009 31.12.2008 31.3.2008 Intangible assets with indefinite useful life * 818 821 621 Other intangible assets 257 261 245 Aircraft and spare engines 8,997 8,764 8,331 Repairable spare parts for aircraft 713 669 573 Property, plant and other equipment 1,982 1,931 1,772 Investment property 3 3 3 Investments accounted for using the equity method 324 298 307 Other equity investments 617 790 882 Non-current securities 389 509 272 Loans and receivables 390 475 305 Derivative financial instruments 480 339 341 Accrued income and advance payments 14 15 20 Effective income tax receivables 73 72 77 Deferred claims for income tax rebates 14 28 6 Non-current assets 15,071 14,975 13,755

Inventories 606 581 513 Trade receivables and other receivables 3,456 3,015 3,492 Derivative financial instruments 342 213 502 Accrued income and advance payments 122 119 102 Effective income tax receivables 55 130 51 Securities 3,806 1,834 1,672 Cash and cash equivalents 979 1,444 2,004 Assets held for sale 31 97 699 Current assets 9,397 7,433 9,035

Total assets 24,468 22,408 22,790

* Including goodwill.

26 Lufthansa 1st Interim Report January–March 2009 To our shareholders I Interim management report I Interim financial statements I Notes to the financial statements Consolidated balance sheet

Shareholders’ equity and liabilities in €m 31.3.2009 31.12.2008 31.3.2008 Issued capital 1,172 1,172 1,172 Capital reserve 1,366 1,366 1,366 Retained earnings 3,414 2,872 3,450 Other neutral reserves 624 579 451 Net profit/loss for the period – 256 542 44 Equity attributable to shareholders of Deutsche Lufthansa AG 6,320 6,531 6,483 Minority interests 62 63 47 Shareholders’ equity 6,382 6,594 6,530

Pension provisions 2,453 2,400 2,489 Other provisions 337 291 346 Borrowings 4,725 3,161 2,945 Other financial liabilities 51 51 32 Advance payments received, accruals and deferrals and other non-financial liabilities 999 1,024 970 Derivative financial instruments 48 118 550 Deferred income tax liabilities 720 710 585 Non-current provisions and liabilities 9,333 7,755 7,917

Other provisions 807 847 704 Borrowings 338 420 315 Trade payables and other financial liabilities 4,039 3,626 3,721 Liabilities from unused flight documents 2,073 1,693 2,035 Advance payments received, accruals and deferrals and other non-financial liabilities 891 882 713 Derivative financial instruments 495 492 369 Actual income tax liabilities 110 99 50 Liabilities included in disposal groups 0 0 436 Current provisions and liabilities 8,753 8,059 8,343

Total shareholders’ equity and liabilities 24,468 22,408 22,790

Lufthansa 1st Interim Report January–March 2009 27 Consolidated statement of changes in shareholders’ equity

Issued Capital Fair value Currency Revalu­ Other Total Retained Net profit/ Equity at- Minority Total capital reserve of transla- ation neutral other earnings loss for tributable interests equity ­financial tion differ­ ­reserve reserves neutral the to share- instru- ences reserves period holders of ments Lufthansa­ in €m AG As of 31.12.2007 1,172 1,366 140 – 180 237 392 589 2,063 1,655 6,845 55 6,900 Changes in accounting ­principles – – – – – – – – 268 – – 268 – – 268 Adjusted amount as of 31.12.2007 1,172 1,366 140 – 180 237 392 589 1,795 1,655 6,577 55 6,632 Capital increases/reductions – – – – – – – – – – – – Reclassifications – – – – – – – 1,655 – 1,655 – – – Dividends – – – – – – – – – – – 7 – 7 Consolidated net profit/ loss attributable to minority interest – – – – – – – – 44 44 3 47 Other neutral changes – – – 185 45 – 2 – 138 – – – 138 – 4 – 142 Adjusted amount as of 31.03.2008 1,172 1,366 – 4 5 – 135 237 394 451 3,450 44 6,483 47 6,530

As of 31.12.2008 1,172 1,366 1 – 5 2 237 393 579 3,140 599 6,856 63 6,919 Changes in accounting ­principles – – – – – – – – 268 – 57 – 325 – – 325 Adjusted amount as of 31.12.2008 1,172 1,366 1 – 5 2 237 393 579 2,872 542 6,531 63 6,594 Capital increases/reductions – – – – – – – – – – – – Reclassifications – – – – – – – 542 – 542 – – – Dividends – – – – – – – – – – – 6 – 6 Consolidated net profit/ loss attributable to minority interest – – – – – – – – – 256 – 256 4 – 252 Other neutral changes – – 77 – 30 – – 2 45 – – 45 1 46 As of 31.03.2009 1,172 1,366 78 – 8 2 237 391 624 3,414 – 256 6,320 62 6,382

28 Lufthansa 1st Interim Report January–March 2009 To our shareholders I Interim management report I Interim financial statements I Notes to the financial statements Consolidated statement of changes in shareholders’ equity Consolidated cash flow statement

Consolidated cash flow statement

Jan. – Jan. – in €m March 2009 March 2008 Cash and cash equivalents 1.1. 1,444 2,079 Net profit/loss before income taxes – 273 54 Depreciation, amortisation and impairment losses on non-current assets (net of reversals) 454 357 Depreciation on repairable spare parts for aircraft and on current assets 55 20 Net proceeds on disposal of non-current assets – 28 – 20 Result of equity investments 0 4 Net interest 68 40 Income tax payments 52 – 29 Changes in working capital * 380 315 Cash flow from operating activities 708 741 Capital expenditure for property, plant and equipment and intangible assets – 614 – 569 Capital expenditure for financial assets – 6 – 15 Additions to repairable spare parts for aircraft – 96 – 26 Income from sales of non-consolidated equity investments 90 7 Income from sales of consolidated equity investments 0 11 Expenses from acquisitions of non-consolidated equity investments – 41 – 224 Expenses from acquisitions of consolidated equity investments – 3 – Income on disposal of intangible assets, property, plant and equipment and other financial assets 131 26 Interest income 33 33 Dividends received 12 9 Net cash used in investing activities – 494 – 748 Purchase of securities/fund investments – 1,986 – 180 Net cash used in investing activities and cash investments – 2,480 – 928 Capital increase – – Long-term borrowings 1,580 204 Repayment of long-term borrowings – 170 – 87 Other financial debt – 16 6 Dividends paid – 8 – 5 Interest paid – 65 – 50 Net cash from financing activities 1,321 68 Net change in cash and cash equivalents – 451 – 119 Changes due to exchange rate differences – 14 44 Cash and cash equivalents 31.3. 979 2,004 Securities 3,806 1,672 Total liquidity 4,785 3,676 Net change in total liquidity 1,178 69

* Working capital consists of inventories, receivables, liabilities and provisions.

Lufthansa 1st Interim Report January–March 2009 29 Notes

1) Standards applied and changes in the group of responding interest expense is to be determined using the effective consolidated companies interest method. The main effects on the net assets, financial and These accompanying condensed interim financial statements as earnings position of the Group will come from the capitalisation of of 31 March 2009 have been prepared in accordance with IAS financing costs for advance payments on aircraft orders placed 34. In preparing the interim financial statements the standards and after 1 January. In accordance with IFRIC 13 Customer Loyalty Pro- interpretations applicable as of 1 January 2009 have been ap- grammes, which is mandatory from 1 January 2009, miles earned plied. Under the revised version of IAS 1 Presentation of Financial but unused under bonus miles programmes are to be accounted Statements, a statement of comprehensive income is required for at fair value using the deferred revenue method. Compared which includes income and expenses previously recognised in with the additional cost method applied to date, this will result in equity without effect on income (other comprehensive income). a considerably higher deferred value per mile and have a corre- The standard will affect the presentation of the financial state- sponding effect on the Group’s net assets, financial and earnings ments, but not the net assets, financial and earnings position of the position. Following this switch, the obligation under bonus miles Group. IAS 23 Borrowing Costs, as amended, replaces the option programmes increased as of 1 January 2009 compared with the of either capitalising or recognising as expenses borrowing costs financial statements for 2008 from EUR 1,026m to EUR 1,454m, incurred in close connection with the financing of the purchase or deferred tax liabilities fell by EUR 103m and equity by EUR 325m. production of an asset with the obligation to capitalise these costs If IFRIC 13 had been applied to the interim report as of 31.3.2008, for financial years beginning on or after 1 January 2009. The cor- the profit before income taxes would have been EUR 16m lower

Changes in the group of consolidated companies in the period 1.4.2008 to 31.3.2009

Name, corporate domicile Addition as of Disposal as of Reason Segment Logistics cargo counts GmbH, Hattersheim 1.1.09 Merger

Segment MRO ­Lufthansa Technik Switzerland GmbH, Basle Switzerland 1.10.08 Established

Segment Catering LSG Sky Chefs North America Solutions, Inc., USA 7.4.08 Established LSG Sky Chefs Rus, Russia 19.5.08 Established ZAO AeroMEAL, Russia 1.7.08 Acquisition CLS Catering Services Ltd., Richmond, Canada 22.7.08 Increased Shareholding LSG-Airport Gastronomiegesellschaft mbH, Neu-Isenburg 1.7.08 Disposal Caterair International Corporation, Dover, USA 31.12.08 Merger Caterair Holdings Corporation, Wilmington, USA 31.12.08 Liquidation International Food Services Ltd., Hong Kong, Hong Kong 1.1.09 Consolidated for the first time CNAC-LSG Sky Chefs (Qingdao) Food Services Co., Ltd., Laixi City, China 1.1.09 Consolidated for the first time LSG Sky Chefs Culinary Service GmbH, Neu-Isenburg 1.1.09 Consolidated for the first time LSG Sky Chefs Gulf Solutions W.L.L., Manama, Bahrain 1.1.09 Consolidated for the first time Fortaleza Serviços de Bordo Ltda., Fortaleza, Brazil 7.1.09 Acquisition Belém Serviços de Bordo Ltda., Belém, Brazil 7.1.09 Acquisition Natal Catering Ltda., Natal, Brazil 7.1.09 Acquisition

Service and Financial Companies ­Lufthansa International Finance (Netherlands) N.V., Amsterdam, Netherlands 15.5.08 Company no longer active Société d’investissement à capital variable Fond d’investissement spécialisé, ­Luxembourg, Luxembourg 5.12.08 Established AirPlus Payment Management Co., Ltd., Shanghai, China 1.1.09 Consolidated for the first time ­Lufthansa Training & Conference Center GmbH, Seeheim-Jugenheim 1.1.09 Consolidated for the first time

30 Lufthansa 1st Interim Report January–March 2009 To our shareholders I Interim management report I Interim financial statements I Notes to the financial statements Standards applied and changes in the group of consolidated companies

and the profit after income taxes EUR 13m lower. As a result of IFRS 8 Operating Segments, which is applicable from 1 January the segment reporting for this reporting period have been adjusted 2009, the segment reporting has been adapted structurally and in as if IFRS 8 had already been applied the previous year. The seg- terms of its contents to the reports regularly presented to decision ment previously known as Passenger Transportation is presented makers within the Group. The main earnings indicator in the seg- under the new name of Passenger Airline Group, without the cen- ment reporting is now the operating result, instead of the segment tralised Group functions. The operating result for the new segment result previously reported under IAS 14. The standard affects the adjusted accordingly was therefore shown as being EUR 15m presentation of segment reporting but not the Group’s net assets, higher in the previous year. There is no further segment reporting financial and earnings position. The comparable figures shown in on the Service and Financial Companies.

Income statement Group of which from Group of which from Jan. – changes in Jan. – changes in March 2009 the group of March 2008 the group of consolidated consolidated in €m companies companies Revenue 5,015 1 5,588 1 Operating income 5,788 1 6,207 2 Operating expenses – 5,852 0 – 5,982 – 1 Profit from operating activities – 64 1 225 1 Financial result – 209 0* – 171 0* Income taxes 21 0* – 7 0* Result after taxes – 252 1 47 1

* Rounded below EUR 1m.

Balance sheet Group of which from Group of which from 31.03.2009 changes in the 31.03.2008 changes in the group of consoli- group of consoli- dated companies of dated companies of in €m the year 2009 the year 2008 Non-current assets 15,071 0* 13,755 5 Current assets 9,397 2 9,035 1 Total assets 24,468 2 22,790 6 Equity 6,382 2 6,530 0* Non-current provisions and liabilities 9,333 0* 7,917 5 Current provisions and liabilities 8,753 0* 8,343 1

* Rounded below EUR 1m.

Assets held for sale Jan. – Financial Jan. – March 2009 Statements March 2008 in €m 2008 Assets Aircraft and spare engines 31 18 340 Financial assets – 79 16 Other assets – – 343

Equity/liabilities from assets held for sale Equity – – 1 Liabilities – – 436

Lufthansa 1st Interim Report January–March 2009 31 of EUR 40m in compensation for damages which occurred in Scandinavia and were described in the consolidated financial Otherwise the same accounting principles were applied as for the statements for 2008 as a contingent receivable under a D&O 2008 consolidated financial statements. Income tax expense has insurance policy. This settles all claims relating to the aforemen- been determined as a best estimate based on the results of the tioned damages. At the end of March 2009 there were purchase consolidated companies and the respective deferred tax rates: commitments of EUR 7.6bn for capital expenditure on property, effects of consolidation were measured at the applicable deferred plant and equipment and intangible assets. As of 31 December tax rates. Permanent differences have been taken into account 2008 the purchase commitments came to EUR 7.2bn. between the carrying amount of an asset or a liability in the consoli- dated financial statements and the corresponding amount for tax Contingent liabilities purposes. The interim financial statements and management report in €m 31.3.2009 31.12.2008 have not been reviewed by the auditors. From guarantees, bills of exchange and cheque guarantees 899 861 The table on page 30 shows the companies which have joined or From warranty contracts 938 901 left the group of consolidated companies compared with year-end From providing collateral for third-party liabilities 3 3 2008 and 31 March 2008. These changes had the following effects on the consolidated balance sheet and income statement in com- parison with this quarter of the previous year. 5) Earnings per share 31.3.2009 31.3.2008 2) Notes on the income statement, ­balance sheet, Basic earnings per share € – 0.56 0.10 cash flow statement and segment reporting Consolidated net profit/loss €m – 256 44 Detailed comments on the income statement, the balance sheet, Weighted average number of shares 457,937,281 457,882,383 the cash flow statement and the segment reporting can be found in the management report on pages 6 to 24. Diluted earnings per share € – 0.56 0.10 3) Seasonality Consolidated net profit/loss €m – 256 44 The Group’s business is mainly exposed to seasonal effects via + interest expenses on the ­ convertible bonds €m 0 0 the Passenger Airline Group segment. As such, revenue in the 1st – current and deferred taxes €m 0* 0* and 4th quarters is generally lower due to less frequent travel, and Adjusted net profit/loss for the period €m – 256 44 higher revenue and operating profits are normally earned in the Weighted average number of shares 460,461,903 460,462,194 2nd and 3rd quarters. * Rounded below EUR 1m. 4) Contingencies Several provisions could not be made because an outflow of re- 6) Issued capital sources was not sufficiently probable. The potential financial effect­ A resolution passed at the Annual General Meeting on 16 June of these provisions on the result would have been EUR 186m for 2004 authorised the Executive Board until 15 June 2009, subject subsequent years. As of the reporting date 2008 the figure was to approval by the Supervisory Board, to increase the issued EUR 195m. A maximum of EUR 2m of the contingent receivable capital by up to EUR 25m by issuing new registered shares to em- mentioned in the consolidated financial statements in connection ployees for payment in cash. Existing shareholders’ subscription with the sale of an equity investment can still be recovered. It is ex- rights are excluded. Following a resolution of the Annual General pected to be realised by the end of 2009. Signed contracts for the Meeting held on 24 April 2009 the distributable profit of EUR 320m sale of three Canadair Regional Jet 200s will result in a total cash shown in the financial statements for Deutsche Lufthansa AG was inflow of EUR 7m in 2010. On 23 March 2009 Deutsche Lufthansa paid out as dividends. The dividend for the financial year 2008 AG and the insurance companies involved agreed on a payment was EUR 0.70 per share.

32 Lufthansa 1st Interim Report January–March 2009 To our shareholders I Interim management report I Interim financial statements I Notes to the financial statements Segment reporting for the ­Lufthansa Group

7) Segment reporting for the ­Lufthansa Group Business segment information January – March 2009

Passenger Logistics MRO IT Services Catering ** Operating Other Recon- Group in €m Airline Group segment total ciliation External revenue 3,475 462 630 61 387 5,015 – – 5,015 - of which traffic revenue 3,290 448 – – – 3,738 – 75 3,813 Inter-segment revenue 139 7 463 87 111 807 – – 807 – Total revenue 3,614 469 1,093 148 498 5,822 – – 807 5,015 Other operating income 364 35 31 13 69 512 314 – 112 714 Total operating income 3,978 504 1,124 161 567 6,334 314 – 919 5,729 Operating expenses 4,008 576 1,063 159 546 6,352 343 – 922 5,773 - of which cost of materials 2,338 379 594 18 225 3,554 22 – 705 2,871 - of which staff costs 771 78 267 59 201 1,376 61 – 2 1,435 - of which amortisation and depreciation (on schedule) 229 30 21 9 14 303 10 3 316 Operating result – 3 0 – 7 2 61 2 21 – 1 8 – 29 3 – 4 4 Other segment income 23 5 2 0 * 1 31 – 28 59 Other segment expenses 4 0 * 1 0 * 2 7 – 72 79 - of which impairment charge 3 – – – – 3 – – 3 Result of investments accounted for using the equity method – 13 1 – 1 – 1 – 12 – 12 – Segment result (profit from operating activities) – 2 4 – 6 6 61 2 21 – 6 – 29 – 2 9 – 6 4 Segment assets 11,072 897 2,901 275 1,231 16,376 1,551 6,541 24,468 - of which from investments accounted for using the equity method 96 33 120 – 61 310 15 – 1 324 Segment liabilities 8,100 501 1,277 218 489 10,585 1,460 6,041 18,086 - of which from investments accounted for using the equity method – – – – – – – – – Segment capital expenditure 558 4 29 17 14 622 32 10 664 - of which from investments accounted for using the equity method 36 – – – – 36 – – 36 Other significant non-cash items 62 5 12 3 6 88 1 – 89 Employees at the balance sheet date 46,070 4,644 19,784 3,059 29,608 103,165 3,675 – 106,840

* Rounded below EUR 1m. ** Due to changes in the group of consolidated companies the comparability of the figures with those of the previous year is limited to some extent.

Lufthansa 1st Interim Report January–March 2009 33 Business segment information January – March 2008

Passenger Logistics MRO IT Services Catering Operating Other Recon- Group in €m Airline Group segment total ciliation External revenue 3,928 675 526 62 397 5,588 – – 5,588 - of which traffic revenue 3,719 656 – – – 4,375 – 92 4,467 Inter-segment revenue 151 7 387 91 131 767 – – 767 – Total revenue 4,079 682 913 153 528 6,355 – – 767 5,588 Other operating income 173 19 66 9 24 291 289 – 66 514 Total operating income 4,252 701 979 162 552 6,646 289 – 834 6,101 Operating expenses 4,215 655 908 151 547 6,476 282 – 828 5,930 - of which cost of materials 2,507 450 466 17 234 3,674 20 – 646 3,048 - of which staff costs 745 79 253 55 202 1,334 59 – 1 1,392 - of which amortisation and depreciation (on schedule) 215 30 20 9 13 287 9 1 297 Operating result 37 46 71 11 5 170 7 – 5 172 Other segment income 8 1 0 * 0 * 12 21 1 83 105 Other segment expenses 0 * 0 * 0 * 0 * 0 * 0 * 0 * 52 52 - of which impairment charge – – – – – – – – – Result of investments accounted for using the equity method – 19 4 0 * – 2 – 13 0 * 13 – Segment result (profit from operating activities) 26 51 71 11 19 178 8 39 225 Segment assets 10,923 1,109 2,370 246 1,171 15,819 1,386 5,584 22,789 - of which from investments accounted for using the equity method 113 33 98 – 59 303 4 – 307 Segment liabilities 8,243 568 1,133 201 520 10,665 891 4,704 16,260 - of which from investments accounted for using the equity method – – – – – – – – – Segment capital expenditure 490 5 20 12 20 547 11 250 808 - of which from investments accounted for using the equity method – – – – – – – – – Other significant non-cash items 61 4 14 2 5 86 0 * – 86 Employees at the balance sheet date 45,893 4,573 18,881 2,968 30,423 102,738 3,569 – 106,307

* Rounded below EUR 1m.

34 Lufthansa 1st Interim Report January–March 2009 To our shareholders I Interim management report I Interim financial statements I Notes to the financial statements Related party transactions Responsibility statement by the legal representatives

Geographical segment information January – March 2009

Europe North America Central and Asia/Pacific Middle East Africa Other Segment in €m South ­America Total Traffic revenue ** 2,658 480 71 447 77 80 – 3,813 Other operating revenue 596 243 37 206 69 51 0* 1,202 Total revenue 3,254 723 108 653 146 131 0* 5,015

* Rounded below EUR 1m. ** Traffic revenue is allocated by original place of sale.

Geographical segment information January – March 2008

Europe North America Central and Asia/Pacific Middle East Africa Other Segment in €m South ­America Total Traffic revenue ** 3,149 553 76 537 81 71 – 4,467 Other operating revenue 593 223 31 167 73 34 0* 1,121 Total revenue 3,742 776 107 704 154 105 0* 5,588

* Rounded below EUR 1m. ** Traffic revenue is allocated by original place of sale.

8) Related party transactions 9) Responsibility statement by the legal representatives As stated in Note 50 to the consolidated financial statements for We declare to the best of our knowledge and according to the 2008, the segments in the Lufthansa Group render numerous ser­ applicable accounting standards for interim reporting that the vices to related parties within the scope of their ordinary business consolidated interim financial statements give a true and fair view activities and also receive services from them. These extensive of the net assets, the financial and earnings positions of the Group supply and service relationships take place unchanged on the and that the interim Group management report gives a true and fair basis of market prices. There have been no significant changes in view of the course of business, including the business result, and comparison with the balance sheet date. The contractual relation- the situation of the Group, and suitably presents the opportunities ships with the group of related parties described in Note 51 to the and risks to its future development in the remaining months of the 2008 consolidated financial statements also still exist unchanged, financial year. but are not of material significance for the Group.

The Executive Board, 30 April 2009

Wolfgang Mayrhuber Stephan Gemkow Stefan Lauer Chairman of the Executive Member of the Executive Board Member of the Executive Board Board and CEO Chief Financial Officer Chief Officer Aviation Services and Human Resources

Lufthansa 1st Interim Report January–March 2009 35 Credits Contact

Published by Frank Hülsmann Deutsche ­­Lufthansa­ AG Head of Investor Relations Von-Gablenz-Str. 2 – 6 +49 69 696 – 28001 50679 Cologne Germany Sebastian Steffen +49 69 696 – 28010 Entered in the Commercial Register of Cologne District Court under HRB 2168 Jobst Honig +49 69 696 – 28011 Editorial staff Frank Hülsmann (Editor) Gregor Schleussner Johannes Hildenbrock +49 69 696 – 28012 Anna-Maria Wehenkel Deutsche ­­Lufthansa AG Deutsche ­­Lufthansa AG, Investor Relations Investor Relations LAC, Airportring Photography 60546 Frankfurt/M. Martin Jehnichen, Leipzig, Germany Germany Phone: +49 69 696 – 28008 Concept, design and realisation Fax: +49 69 696 – 90990 Kirchhoff Consult AG, Hamburg, Germany E-mail: [email protected]

Printed by Broermann Offset-Druck, Troisdorf, Germany

Printed in Germany You can order the Annual and Interim Reports in German­ or ISSN 1616-0231 ­English via our website – www.lufthansa.com/investor-relations – or from address stated above. The 1st Interim Report 2009 is a translation of the original German Lufthansa­­ 1. Zwischenbericht. Please Latest financial information on the Internet: note that only the German version is legally binding. www.lufthansa.com/investor-relations

Disclaimer in respect of forward-looking statements

Information published in the 1st Interim Report 2009 with regard to the future development of the Lufthansa­­­ Group and its subsidiaries consists purely of forecasts and assessments and not of definitive historical facts. Its purpose is exclusively informational identified by the use of such cautionary terms as “believe”, “expect”, “forecast”, “intend”, “project”, “plan”, “estimate” or “intend”. These forward-looking statements are based on all discernible information, facts and expectations available at the time. They can, therefore, only claim validity up to the date of their publication.

Since forward-looking statements are by their nature subject to uncertainties and imponderable risk factors – such as changes in underlying economic conditions – and rest on assumptions that may not or divergently occur, it is possible that the Group’s actual results and development may differ materially from those implied by the forecasts. Lufthansa­­­ makes a point of checking and updating the information it publishes. It cannot, however, assume any obli- gation to adapt forward-looking statements to accommodate events or developments that may occur at some later date. Accordingly, it neither expressly nor conclusively accepts liability, nor gives any guarantee, for the actuality, accuracy and completeness of this data and information.

36 Lufthansa 1st Interim Report January–March 2009 Financial calendar 2009/2010

2009 2010

30 July Release of Interim Report 11 March Press Conference and Analysts’ Conference­ January – June 2009 on 2009 result

29 Oct. Press Conference and Analysts­’ Conference­ on 27 April Release of Interim Report interim result January­ – September 2009 January – March 2010

29 April Annual General Meeting, Berlin

29 July Release of Interim Report January – June 2010

28 Oct. Press Conference and Analysts­’ Conference ­on interim result January­ – September 2010 www.lufthansa.com www.lufthansa.com/investor-relations www.lufthansa.com/responsibility